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Reply #6: There's always a gap between interest we make and interest we pay [View All]

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Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010)

Warpy

(1000+ posts) Send PM | Profile | Ignore

Sun Apr-11-10 10:00 AM
Response to Original message

6. There's always a gap between interest we make and interest we pay

and that's how banks make their money.

While the gap between credit card and CD interest might seem unconscionable, credit cards are by and large still offering bargain rates for unsecured, high risk consumer loans. The gap between CD interest and home mortgage interest is about where it always was.

But yes, credit cards are heading back to that standard 18% interest rate, one that was decided upon in the 60s as being a fair return on a high risk loan.

The cure for that feeling of being ripped off by banks that collect a lot and pay a little is reducing what they collect: stay out of debt beyond an affordable mortgage.

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