How much interests do credit card companies charge for lending money to consumers?
Write it down.
How much do licensed money-lenders charge?
Try google or make a phone call.
Write the rates down.
Ever wondered how much do illegal money-lenders charge?
Talk to a taxi-driver.
Write it down.
Now, if you have $1,000 to lend to a stranger (can be a company) you have never known before, how much interests would you charge?
If you charge lesser than the credit companies, someone is sniggering behind your back.
Remember, credit companies have access to your credit report before approving your credit card application.
If you default, there are quite a few legal recourse to recover their money:
Wage garnishment
Levy on your savings accounts
Lien on your assets or property
Pray tell how are you going to recover your $1,000 in the event of a default? Small claims court? Ask big daddy for help?
Yup, by now, you probably want to charge "Ah Long" rates for the risks you are taking!
Before you do so, you may want to check with your religious shepherd whether this may fxxx-up the end game for your after-life...
We don't want to be more financially literate than those amateur retail "money-lenders"; but end up committing the sin of usury, do we?
Ouch!
Singapore Man of Leisure (welcome to my blog; just google it!
