hanson001

Wall Street Breakfast: Must-Know News

"Effective as of July 2010, credit card companies will be able to increase interest rates only on new credit cards and future purchases or advances, rather than on current balances."

Someone carrying a balance on a credit card is not wise, but can you believe that companies can change the interest rates on current balances. I know this is probably stated in the print of the contract that one needs the Hubble Space Telescope to read, but I don't think any rational person would think this should be legal.

If someone has a fixed mortgage, the interest rate doesn't adjust. The interest rate risk is borne on the institution supplying the funds and the person paying the mortgage.

I know we have variable rate mortgages and most credit cards are variable rate cards. But I would be interested to see if interest rates on cards went down on good credit customers balances when the Fed funds rate, or other tracking rate went down. Bet not.

Bad times display character traits like no other. Like Buffet states, when the tide goes out, only then can you see who was naked. As an investor, I like these times, since it allows me to align my long-term investments with companies that display a greater character.