This article appears in Dec 11-17, 2008.
Banks giving you that pounding feeling??
Interesting how the prime rate is at its lowest rate in 50 years yet the banks are offering unsecured consolidation loans at 16.75% to someone who has good credit and never missed a payment. They run the risk of taking billions in writeoffs, yet they use
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What total fucks banks are. Instead of stimulating the economy, they’re just concerned about their almighty bottom line. It should be legislated that if the Bank of Canada establishes a rate, the banks should be required to follow suit.
FYI I noticed that my line of credit interest rate went down to 4.5 today; it was around 7% a year or so ago…it’s not all bad news!
yeah, Jammie, considering the average rate of inflation right now is about 4.5% in NS, you’re only incurring double the cost of whatever you’re using your LOC on instead of almost triple. 😉
You’re right Gidge. My balance is zero though, so I don’t care. :-DAnyway, you get my point – some rates are actually decreasing in keeping with the key rate decrease yesterday, so we’re not ALL getting as screwed as the OP is.Unfortunately I suspect it’s only the wealthy that get to avoid the mess altogether. It always makes me mad that my wealthier friends get to pay 30 grand for a 30 grand car, whereas it costs me about 33 grand in the long term. Argh!
A friend recently tried to pay cash for a car, and asked if they’d give him a deal. They said they could only cut him a deal if he financed. Banks gouge like crazy. Bastards.The ironic thing is, they charge US ridiculous rates, but give us the lowest rate of return you can get while making money on our money. We need to stop putting our money in bank-led investments and let them all fall.
The problem isn’t the banks, it’s our insatiable need to live above our means, which means living on credit. In the run of a day at least 50% of the customers going through my cash at the grocery store are using credit cards. On top of that, I have friends who have huge homes, fancy cars, etc… yet don’t have any money to buy themselves a coffee. Perhaps if they hadn’t financed that huge house, or bought a smaller (or used) car, they wouldn’t be in debt up to their eyeballs and wouldn’t HAVE to use their credit cards to buy groceries OR use one credit card to make payments on another.I don’t have one bit of credit and I’m doing just fine. If I can’t afford to pay cash for it (after saving or outright) I can’t afford to have it. Period.
Oh and to add to my point: financing some things is necessary, I DO know this (before I get flamed up my ass) — houses, cars, education, etc…, but it’s stupid to finance these things beyond your means. if you can’t afford to feed yourself without using a credit card because you’re making HUGE car/mortgage payments, or you’re living on an equity line of credit, maybe you should consider downsizing 😉
pretty kitty you make excellent points. a recent issue of macleans highlightes that while canadians do probably live beyond our means, we are nothing compared to americans. we pay our mortgages, eventually, but they live on the assumption that they can just keep re-mortgaging and in fact never ever pay their homes off. that’s why they have crashed so much harder than we have.
The reason that Canadian banks DIDN’T fail during the financial crisis is because they DIDN’T give out loans to EVERYONE who wanted one at an “easy” interest rate only to find that those people couldn’t pay. If the banks fail, the people who don’t need loans are going to have to pay to bail the banks out via taxes like happened in the US. If the banks want to keep a measly 0.25% from people who are BORROWING MONEY (which, btw, costs money for a reason, and it’s very possible to not borrow) to stay afloat and have that not happen, then let them. Anyone who thinks a bank is there to “owe” them something or that the government should have control over what is a BUSINESS needs to move to another country, ie: Soviet Russia.
I saw a story on the news tonight briefly that said canadians have HUGE amounts of personal debt. What always got me were these “interest only” mortgages where people only make the interest payments and let the principle slide. That along with 40+ year mortgages banks in the US were handing out like candy are def. responsible for the american economy ending up fucked up the ass.