Mapgirl’s Fiscal Challenge

Usury is unChristian. It used to be a sin. In our current economic state of affairs, is it still a sin or a necessary evil?

I avoid religion in my blog, and that’s as far as I’ll go. Think of it as a philosophical question instead of theological and continue forth with the rest of the questions I am going to pose.

Boston Gal points us to an article about ‘auto title loans’. I’ve never heard of such a thing. But whatever it is, it can’t be good since it’s aimed at keeping poor people poor.

The first thing that came to mind while reading BostonGal’s pull quote is just what is the interest rate being charged? Looks like 200+% in some places!!! Three digit interest rates? Surely you are joking!
Shopping for credit is just like comaparison shopping for clothes or shoes, the products are the same thing, but embellished differently enough to charge you crazy rates across the spectrum. (I want to know who the heck gets 1.9% APR financing for car? NOBODY. That’s who.)

I shop for credit, and just like shopping for anything else, I say to myself, ‘I’m not going to spend more than X for it.’ For credit, X is your interest rate. (Formally, this is what’s called your reservation price.)

When I shopped for a mortgage 3 years ago, I knew I didn’t want to pay anything more than 6% for my primary loan. I had looked around at various places for interest rates in my area and got a feel of what I should be able to get and what was too high. I didn’t really know what I qualified for, and I played it pretty conservatively. I did ok with that. But the HELOC on the house climbed to 10+% before I figured out how to convert it to a lower fixed rate loan without penalty. Yeah, I didn’t think I should pay 10% APR for a home loan. Not at all.

Recently, I looked into refinancing so I could consolidate into one single payment per month. (Drives me nuts to track a second account for a single thing.) But my reservation price tells me it’s not worth it at today’s credit rates, high 6’s and low 7’s.

Lately I don’t like to pay more than 15% APR for a credit card. I know I’m borrowing money for a shade more than that, like 15.9%, but as soon as it hits 16%, I give those guys a call and ask them to lower the rate. I’ll call every 6 months if I have to.

I don’t think there is any reason in life to pay more than 20% interest on anything. No payday loan, no direct deposit advance, NOTHING. Even when my credit card rates were high about 5 years ago, I got that stuff consolidated down from 17-21% to 15%.

Ask for a Truth-In-Lending sheet from the loan provider. I got one when my mortgage papers were sent to me. I didn’t understand it, but none of the interest looking numbers said over 6%, so I was happy. TILA also covers credit card companies as well, so read your fine print. Even if your rate is variable, it should give you an example of the current rate and even sometimes how to find the rate in the Wall Street Journal.

I gotta learn to make a poll. What is the highest interest rate you will tolerate for a credit card? What about a mortgage?

Sidenote: OMG!!! I just figured out how to cut my posts with a MORE tag. No more lengthy posts! I have sneakily figured out how to make you suckers click more for greater page views. MUHAHAHA!