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I know there is a personal responsibility part of this but banks end up prying on the financial illiterate. Somehow my wife has a student loan with 12% interest
by johnward 11y ago
I know there is a personal responsibility part of this but banks end up prying on the financial illiterate. Somehow my wife has a student loan with 12% interest. I'm not even sure how that happens. I also don't understand how interest rates are so low but CC interest is so high. They are basically borrowing free money and then charging people 29% on it.
- charlesdm 11y agoCC interest is high because: 1. Most people pay off the balance each month; the people who don't _really_ need the credit. 2. The default rate of those people is probably (very) high. Given a default means a bank loses their capital, they need to make it back somehow. Also, a student loan with 12% interest? If the loan still carries a significant balance, she should refinance at a much lower interest rate (pledge some collateral if you have to, like a car/house/existing share portfolio).
- icebraining 11y agoI'm not saying it justifies the whole 29%, but CCs have a much higher rate of default, which leads to higher interest rates.