I don't get it part 3

Miles Jackson cqmv at pdx.edu
Wed Apr 19 12:05:52 PDT 2000


On Wed, 19 Apr 2000, Enrique Diaz-Alvarez wrote:


> I get three or four such offers a week. They specifically say that the rate is
> fixed for the life of the loan -for most US households, that's likely to be a
> very, very long time, unless they file for bankruptcy.
>
>

Yes, the rate is fixed--if you never miss a payment. Miss one payment, the rate jumps. Miss two, it's up around 20%. Given the fact that numerous factors can cause a person to miss a payment--poor mail service, job loss, unexpected expenses--I would imagine it's common for these 10% offers to become regular credit crad debts in a few years. In fact, this is probably what the credit card issuers are betting on.

Miles



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