See, the study compared the rates banks are charging right now against the rates charged during a milder recession that happened in the early 90s. What they found was that during both periods banks raised their rates. A lot. The idea is that the banks were trying to make up for lost profits from bankruptcies and lost accounts by charging the rest of their customers more money.
So, why does this matter to you? Well, your credit card probably doesn’t have a 60 percent annual percentage rate, but you may have already seen it go up.
According to CreditCards.com, the national average APR is 14.73 percent. At this rate, if you had a $1,000 balance on your card, and paid only the minimum payment, by the time you finished you would paid over $500 in finance charges, making whatever you bought cost 50 percent more!
Do you know what you are paying in interest? A higher rate means it’s more expensive to spend your own money using credit. If you are going to use a credit card, call the phone number on your bill and check what your rate is. Sometimes, a simple call is all it takes to lower your APR and save you some cash.
And that’s what’s happening outside the Grove.