WolfWood

Interest Rates

Recently I came across this quote, and it made me think about interest rates and how they affect our lives. 

"Interest [on debt] never sleeps nor sickens nor dies; it never goes to
the hospital; it works on Sundays and holidays; it never takes a vacation;
it never visits nor travels; it takes no pleasure; it is never laid off
work nor discharged from employment; it never works on reduced hours. ..."

-- J. Reuben Clark, Jr. (1871-1961)
American lawyer, statesman and clergyman

When interest rates are high, income from shares is usually low.     Rates change frequently, and the wise person keeps an eye on them, and their credit card debt.

High interest rates can make buying your own home, or even keeping up with the mortgage payments, impossible.  

Banks are often guilty of lending large sums to people, without really considering whether or not they can afford the repayments. The result of this can lead to repossession of their home, car, or other goods.

Credit card debt is notorious for being at high rates at the best of times, so when the interest rate climbs, so does credit card debt. This, in turn, leads to difficulty in meeting the monthly payments, especially if the card has been used to its maximum extent. 

I'd advise anyone to think very carefully before borrowing any amount of money, either from a bank, or any other type of financial institution. Store cards and credit cards can become traps for the unwary.    Store cards in particular can have extremely high interest rates.

Work out a budget, know how much you can afford, and work within it. Be sensible with your money, and keep within your income - that way, you won't lose anything, particularly your self-respect.

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© WolfWoodWares & J D'Andrea, December, 2008