Why aren't we interested in interest rates?

The threat of a minor change in mortgage rates tends to send everybody into paroxysms of panic, but it seems we aren't so fussed when it comes to interest rates in general. Two recent surveys by Citibank suggest that most of us would use a credit card for a major purchase even though a personal loan would have a much lower rate, and that we have no idea what interest rate is paid on our savings accounts or term deposits. Colour us apathetic, it appears.
Turning a technological bent to the problem, it seems to me that finance companies could make this task easier by offering an RSS feed of all their rates, making it easy to keep track of changes. Any other thoughts on how tech might get us to actually track the money we make from our money?


Comments

    Why would most banks or financiers want to keep you updated on credit card or savings account interest rates? When concerned with the former, the more they keep you in the dark about your interest payable the more likely you'll rack up an account and make them money. With the latter, if you don't know what your current account's rate is, you're not going to be a very good target for competitors trying to entice you away with a better ate.

    The reason we aren't interested in interest rates on a lot of things is because most people don't care. They don't want the hassle and cost of signing up for a personal loan (or even in store 'interest free' finance). Sure it might cost them, but the answer is usualy not much.

    I've just broken down a comparison of the Citibank peronal loan they are talking about. What they kind of avoid mentioning is that there is an establishment fee ($150) and on top of the interest, there is also a $7 per month account fee ($84 per year).

    If your credit card charges 19% then its comparable to a citibank loan at 12.74% after fees on a 2 year loan with a purchase of $5k.

    But if your credit card is charging you 19% interest, why the hell are you still using it. I've got 4 credit cards (which I only use to disect expenses and pay off in full). All have interest rates around 15%, except for the AMEX which is 19%. All have interest free days, and the AMEX has a rewards program. All have NO ANNUAL FEE. Thats what to look for in a loan or credit card.

Join the discussion!

Trending Stories Right Now