Got Questions? Just Ask Freeman.
Ask Freeman.
Call Toll Free:
(866) 471 7233

Freeman's Blog


74 percent of Americans are not likely to borrow money even with low interest rates

Source: Bankrate.com – “Borrow money? ‘No thanks,’ say consumers” Oct. 22, 2012
This result comes from a Bankrate.com survey in 2012 after the Federal Reserve’s recent declaration to keep interest rates shockingly low until 2015. By keeping interest rates low, the Federal Reserve aims to stimulate economic activity through consumer spending and borrowing. But despite the low rates, Americans are focused on spending less.

The Federal Reserve announced that interest rates would remain at these all-time low rates for an additional one year beyond their expectations. That gives Americans who do want to borrow an additional year of low interest rates.  But this notice of extension for low interest rates tells Americans that there isn’t any major rush to take advantage of the low interest rates. They will be around for years to come still.

While more consumer spending would boost economic activity, consumers are still recovering from previous spending binges. In fact, the most recent numbers from the Federal Reserve showed that total household debt is at 103% of disposable income. Granted, total household debt is down from 123% when the economic depression began, but it is no where near the expect norms of 10-15 years ago. About two decades ago, Americans had a total household debt around 80%.

Americans are facing continued fear of unemployment. The Federal Reserve might be trying to nudge consumers to increase their spending and borrowing, but without job security, Americans are concerned about how they will pay back their loans.

life_guide_retirementMaybe it’s a sign that Americans are returning to an era of “spend less than you earn”.

Get my free guide “Thinking of Retirement” and let’s begin the process of retirement strategy. Get the most from your retirement nest egg. My consultation is always free: (866) 471 7233.