Credit card rates far from prime

A clear picture of bank rates is needed to educate the consumer. Banks lend to prime borrowers, usually corporations at the prime rate, currently 6%.

Credit card rates, depending upon your credit standing, range from 9% to 31%. For the most part banks do not pay interest on demand deposits. These are funds in checking and savings accounts. If they do pay interest, it is presently one-half of 1%.

The best illustration of greed is to compare a $10,000 balance in a checking account earning 0.5% and a $10,000 card balance with an annual percentage rate of 20%. You would earn $50 on your checking account and would pay $1,111.62 in interest on your credit card, if you paid the card off in one year. The numbers are exponentially worse if you make minimum payments on your card.

That’s greed.

Robert Pisapia

Westlake Village