Since peaking in July 2007, prior to the 2008 credit crisis, interest rates have fallen and have remained at their lowest level in two generations. Experts predict that this could be the year that interest rates finally start to increase. The question is, should we really care?
While the concerns regarding the potential negative impact of certain high interest loans are legitimate, the debate has failed to consider the context in which high interest loans exist. It is too simple to label a loan "high interest" by looking only at the annualized interest rate. There are many other factors that determine the true cost of borrowing.