Interest rates help who?

FatRakoon

FatRakoon

FatRakoon

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Just somethign that is bugging the hell out of me here..

The recession has taken its toll on everyone right.

So, things have t ochange and among the changes the interest rates have dropped right?

Now, Im looking at a few things here...

My Ban kinterest last year was giving me £4.85 a month
Because of the interest rates dropping off, Its now at £0.27p

Ok, this is painful, but necessary right?

How come my credit card payments have not dropped off?
How come they are jus tas extortionate as ever???

Who is this benefitting?

Its certainly NOT me.

Once again, the banks are doing just fine and its me who is suffering.

I bet that many of you are in the same boat!

Can a money mogul please explain this to me?
 
Yep, despite base interest rates being low, the spread is crazy between lending and savings interest rates :( The banks are maximising their profits this way.

Basically, bend over, you're getting shafted.
 
Helps people with the biggest debts you usually have in your life, mortgage.

That saving on debts of hundreds of £1000's is usually a hell of a lot more than losing a few quid on interest on savings.
 
The only winners are people who have a variable-rate stupidly oversized mortgage, and instead of them being the ones hurt by the recession, are now laughing at tiny repayment sums. :(

Sadly, mines fixed for another 3.5 years at 5.49%
 
People with mortgages benefit - either if they have a tracker or are on the Standard Variable Rate. In the last recession the Conservatives put up interest rates to 15% for a short time - I still remember the queue of people outside every bank and building society with a ghastly, fearful look on their faces.

Businesses benefit as their loans are often variable rate and (if they can convince the banks to lend to them) they can borrow money to invest cheaply.
 
How to avoid credit card interest in one simple easy step:

1) Setup a direct debit for full balance each month.

Bingo, no more interest.
 
1pudding1 said:
Helps people with the biggest debts you usually have in your life, mortgage.

That saving on debts of hundreds of £1000's is usually a hell of a lot more than losing a few quid on interest on savings.
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Few quid? I lost a 3 figure sum this year alone in 'interest', as I can manage my money sensibly and don't borrow 10x more than I can pay back.

Where are the 'measures' for savers that were alluded to? Up Brown's ****, that's where.
 
Well i'm saving around £350 per month on my mortgage over what i was paying this time last year. Came off the fixed rate in Feb and am now on the SVR.
 
On a similar note, who is actuallly suffering from this recession?

The few (comparatively) people who have lost their jobs, who else? (other than the people with savings..)

I keep hearing programs talking about making your money go further (such as making your own lunch instead of buying it) etc.. Well is it me but if you "still" have your job you are in no worse a position than 2 years ago? I know no one who has been fired or even remotely affected by this. :confused:

Is there something massive I am missing?
 
Amp34 said:
On a similar note, who is actuallly suffering from this recession?

The few (comparatively) people who have lost their jobs, who else? (other than the people with savings..)

I keep hearing programs talking about making your money go further (such as making your own lunch instead of buying it) etc.. Well is it me but if you "still" have your job you are in no worse a position than 2 years ago? I know no one who has been fired or even remotely affected by this. :confused:

Is there something massive I am missing?
Click to expand...

Of course. For the majority of people its simply a case of not getting that pay rise they would have got. But in terms of major shifts in poverty its the "few" people who lose their jobs.
 
The thing that made me laugh about the whole making your own sadnwiches for lunch at work is that the people who are working are no worse off than they were before this, and the people that actually need to save money... are the ones who don't need lunch for work...

It really summed up the hysteria that seems to be around atm, perpetuated mainly by the media?
 
Amp34 said:
The thing that made me laugh about the whole making your own sadnwiches for lunch at work is that the people who are working are no worse off than they were before this, and the people that actually need to save money... are the ones who don't need lunch for work...

It really summed up the hysteria that seems to be around atm, perpetuated mainly by the media?
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I think its also the fact that commodity price rises and food prices have coincided with the latest recession.

For example, talking to the average person, they don't realise that prices actually fall in a recession. Inflation slows down and sometimes we get deflation. Everyone's thinks everything is more expensive.
 
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The issues you are ignoring include the forms of credit and reasons for individuals and businesses to source lines of credit. If your company suddenly does not have enough cash flow to support itself, what happens? More small businesses than you seem to be giving credit for are failing/struggling at the moment.

Good luck for people who would like to get a mortgage moving from 1st new home to 2nd new home. They no longer qualify for the high rate interest with low equity. This halts house sales dramatically, estate ageents + solicitors + anyone else associated loses business as a result.

The knock on effect of simple and obvious cycles is what you are ignoring Amp34.

The banks have to cover losses written off and now show they are still able to make a large profit to maintain their level of trust and credit.
 
Amp34 said:
The few (comparatively) people who have lost their jobs, who else? (other than the people with savings..)
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Few people with savings is 18 million people - and that's just ISAs, with ~5 million using the full allowance each year. Just so you know.

Plus those non-ISA savers have also been shafted by inflation and plummiting interest rates.
 
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meghatronic said:
Few people with savings is 18 million people - and that's just ISAs, with ~5 million using the full allowance each year. Just so you know.
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Yeh but how many people actually have net savings. 18 million with ISAs is just not a sensible figure to look at.

Sometimes its sensible to hold both debt and savings if you can ensure that the tax savings over the ISA lifetime is higher than the interest you pay on existing debt. I doubt many satisfy that condition.

Plus those non-ISA savers have also been shafted by inflation and plummiting interest rates.
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Plummeting inflation is good for savers. When deflation takes place, there is a real gain in simply holding cash. Very perverse incentives which central banks try to avoid at all costs.
 
Amp34 said:
On a similar note, who is actuallly suffering from this recession?
Click to expand...


Around where I live?

Thats a stupid thign to ask.

The average weekly wage around here is £160pw take home, thats well below the uk Average... WELL BELOW.

There are 3 main employers that pay good wages

1 - Hotpoint ( Everyone is on a 3 day week and now they have been told that the factory is closing )

2 - Quentin Hazel ( Closed the local and now have only manchester so local jobs have gone from there )

3 - Dolgarrog Aluminium plant ( Closed down last year )

Between all 3 thats over 1000 jobs gone.

There is already 12000 out of work in my local area alone without these also going.

Where I live the recession has hit very hard.
 
[TW]Fox;13935191 said:
How to avoid credit card interest in one simple easy step:

1) Setup a direct debit for full balance each month.

Bingo, no more interest.
Click to expand...

Just what I would like to be doing. Build up my credit rating for when I actually need credit. Oh wait, i can't get a credit card because I have no credit rating. Uhmmm :o. Should have got a credit card last year when they were giving them to tramps in the street.
 
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