WORDS of wisdom flowed from my parents while I was growing up and I would have done better in life if I had paid more attention.
Amongst them was the warning to never over-reach financially, never go out and buy anything you really can’t afford.
There have been many times when I failed to heed that message, but overall, I have survived without having to stress if I could pay the next big bill that landed in my letter box.
The furore over the Reserve Bank’s consecutive rate rises is hurting many of us, especially as the banks find it easy to raise their loan rates in an instant but take months to offer better returns on savings.
Those with large mortgages are feeling the pain the most and while I also feel for them I must wonder why they committed to such a massive loan.
Yes, housing prices went up quickly, but the decision of where to buy and what to pay was always in their hands.
If you commit to borrowing $500,000 plus you’re kidding yourself for thinking that interest rates will always be low. I am not backing the banks here; in fact, their arrogance is beyond belief.
They are making billion dollar profits yet they continue to cut back on services by closing banks, taking away ATMs and reducing staff at an alarming rate.
Making an appointment to go and see the local bank manager is impossible, because in many areas here is no local bank to have a manager in.
The banks spun their web years ago offering easy to get credit cards with high limits and now they have those who fell into the trap battling to pay them off at obscene interest rates.
The bottomline is we have a financial nightmare on our hands and many are drowning as the tide rolls in.
Will the banks bail us out? No, they will just sell up those who go under and continue to use the excuse they have to meet shareholder’s expectations. If you want to take up an offer to reduce your credit card rate by opening a new card with a different bank get set for a forensic search of you bank accounts.
One friend would always take out his weekend $200 spending allowance from an ATM on his walk home from his Sydney CBD office.
When he applied for a new account at another bank he was refused because they noted the ATM he was using just happened to be outside Star Casino.
They classed him as a potential problem gambler even though he never went to the Casino. Our banks have become impersonal, arrogant, and out of touch with reality, but unfortunately few of us have the ability to tell them to go jump.