Interest Rate Increase
SO the interest rate just went up again. Blame the petrol price. That pushes up the CPIX (Consumer Price Index), which puts pressure on our spending power, and so the next logical thing to do is raise interest rates so consumers have even less cash to play with and more debt to handle.
Forgive my innocence - I didn't take economics - but how does increasing the amount of debt consumers pay somehow create a better fiscal situation? Are people who now pay an extra few hundred Rand on their Bond and credit card debt going to stop eating? Are they going to sell their cars and houses and rent?
I doubt it. OK, we are a nation of happy spenders. At least we don't have empty shelves at the supermarkets and the petrol stations can generally handle the inflow of traffic, unlike the plight of our neighbours to the North.
In saying that, the banks are very happy to hand out credit cards, and shops are just as keen to get you to buy on credit.
You sure as heck are going to PAY LATER. Thanks to the cost of interest.
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In saying that, who benefits the most when the bond rate increases? Certainly not the consumer. No, it's the banks. So why should they get away with making all the money? Why don't they change the way they charge interest? Car repayments, credit cards, bonds, loans, we are a nation in debt, and the banks are smiling all the way to the . . .
There was supposed to be an investigation into how the banks make so much money, and why they charge so much in fees? I do internet banking, and pay THEM to do THEIR job!
I wonder what they would do when they sent my statement asking for replayment on my credit card, to which I replied, "Please could pay me R29 000 in service fees to me for doing your job over the last 4-5 years when I operated an Internet Banking account and did the job your tellers are paid to?"
I wouldn't hold my breath, that's for sure!
Until next time... Cheers!
Michael
added - 7 December, 2007
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