“ …Cards with the highest value rewards are often available only to the rich. First, you’ll need a credit score of at least 700 to qualify for a premium card. That eliminates half the country….Second, issuers consider your income and debt-to-income ratio, which can be used to disqualify card applicants with high credit scores.” The New York Times, March 4, 2023
(Thanks to Jan Peppler, PhD, who writes the fabulous newsletter, Finding Home for sending me this article!)
There are a good number of both esteemed economists and elected officials who disagree with the Federal Reserve’s decision to raise interest rates in an attempt to lower inflation. One major reason for this disagreement is that it translates to higher interest rates on credit cards, auto loans and mortgage loans. The cost of borrowing money goes up, which is exactly the point from the Federal Reserve’s view. The theory is if it costs more to borrow money, people will borrow less and thus buy less, resulting in decreased demand and then presumably, lower prices. Unfortunately, less borrowing and buying slows the economy, people lose their jobs…and eventually our economy sinks into a recession.
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