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Forum Post: Interesting Interest Rates

Posted 12 years ago on Oct. 30, 2011, 4:47 p.m. EST by TAXBILL (0)
This content is user submitted and not an official statement

The PRIME Rate = 0.25% The Mortgage Rate = 4% The Auto Loan Rate = 12% The Credit Card Rate = 29% WHY



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[-] 1 points by Notconfusedanymore (62) 12 years ago

Credit Card rates are based on your credit rating. If you have negative marks on your credit rating, you become a risk to extend credit to, so credit card rates are higher. Auto loans work the same way. The others I'd have to ask someone who knows more about that.

[-] 0 points by asauti (-113) from Port Orchard, WA 12 years ago

Possible Answer: Think of it like a pyramid scheme. The top creates the money and gives it to a select few at a low rate. They are then able to do the same to their audience, and so on. The distribution model of the money ends up looking like a pyramid.