Credit Spreads Amplify

During this current recession the spread between prime rate (4%) and APRs (28%) is an astonishing 24%. This means that the cost of capital is 24% higher than the lending rate. Compared to the prior 4 recessions, this spread continues to widen, from just over 8% in the early eighties and 10% in the early nineties.

cc-vs-prime-spreads

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