I remember in the 80's when interest rates were at an all time high of 18% and much higher for cc.

Right now people have cc debt alone at the rate of 30% of their incomes. Economists are very concerned that if interest rates were to go up, many people would be in serious trouble.

What would happen to your finances should interest rates go up on cc debt or heaven forbid, should interest rates go up on mortgages to 10, 15 or even 20%?

I'd be in big trouble!!!!:eek:

We'd sink! There is no way we could pay the bills.

I have a fixed rate on my mortgage and no CC debt, so I think we'd be ok, fortunately.

It wouldn't really be a problem for us b/c we only use our credit cards to the point that we can pay them off each month. We don't have a mortgage or any car loans so we're not too worried about rates.

We also have a fixed rate mortgage and we pay the cc off each time we use it.

I read in the paper's editorial section a while back about this sort of thing- and it painted a really scary picture of what could happen. If the interest rates went up- how could banks afford to pay out higher rates on deposit accounts if they're collecting very little off the interest on loans. If you have a fixed interest rate on your house, could the bank "call in" the loan- forcing you to pay off the balance now, or sell to pay it off if you don't have that type of cash? I know that's what heppened to the guy here who used to own the general store. He had to sell it because the bank wanted it paid rightthissecond and he couldn't do it. I'm not sure how common that is. But if that happened to us- we'd be out of a house.

But we do have a fixed rate, only owe $1000 on the CC and just have 1 relatively low car payment so I think we'd be OK.

I would be very happy that I have a fixed rate and that my credit cards are almost paid off. I would also be happy that we have an emergency fund for things that happen just in case.

I would be ok, because we only have one year to pay our mortage and we have only a little amount on our credit card which will be paid soon. But I can just imagine how it could be tough on some families!

My brother says the high interest rates in the early 80's is how he lost his home. He was depressed for a long time after that.

we would be hooped! We lived thru the early 80's, and lost a LOT of money then. Many around us lost their homes. We were nearly paid off but it ate thru our equity and left us with almost nothing then.

Dh and I have always made sure we were locked in at the lowest possible rate for the longest possible time, just in case those days come again. referring to mtg.

As for credit card debt, well that is another story, and that is even more incentive to get that sucker paid out!:bang:

With the credit card companies did you notice when interest rates go up so do their rates but when the rates drop, they don't drop their rates? I was reading an article how loan sharks charge about 20-25% interest and how the credit card companies didn't charge that much less then a loan shark.

You are SO right! they are just socially accepted loan sharks I am sure of it!:bang:

what I get frustrated with is how did we get sucked back in???? I know better!:bang:

Originally posted by Shell
With the credit card companies did you notice when interest rates go up so do their rates but when the rates drop, they don't drop their rates? I was reading an article how loan sharks charge about 20-25% interest and how the credit card companies didn't charge that much less then a loan shark.

Dept stores are the worst. Sears is up to 22%. Since they accept all major CC's- they don't offer much incentive to have theirs. When a store offers me an application for their card- I just ask them if they can beat 4.99% fixed. That usually quiets them right up :toothy:

We have a fixed rate on the house but we'd have very lean times trying to pay off the cc. I think however we would squeek by.

We have a fixed intrest rate on our mortgage and have no credit cards.The only thing I would worry about would be our car loans.Which are now at an intrest rate of 4% and 7.2%.