November 13, 2001 -- It is very hard to look through the emotional darkness of the tragic terrorist acts of September 11th, the anthrax episodes, the continuing tensions between Israel and the PLO, and the decline of the world economy . . . but citizens of or visitors to the United States can take advantage of a few good things depending on one’s financial situation.

All of it centers on federal interest rates at 40 year lows associated with many consumer product market segments offering excellent value buys.  And there are many ways to benefit as a consumer without negatively impacting the ability to meet the obligations.

Refinancing your home, buying a new home or new car, and consolidating credit card bills and other debts or home improvements through an equity loan quickly come to mind on how one can reduce monthly expenses and increase discretionary income for other needs . . . like Christmas gifts or even a trip.

The first thing I would suggest to those who are unhappy with their credit card debt and have equity in their home is determine total current and required minimum monthly payments of credit cards.  Then compare what an equity consolidation loan at the best interest rates you can find over 7 to 15 years.  The key here is trying to reduce your monthly payments without the intent of adding more debt to your credit cards.  So, your savings by this approach can take care of new purchases on a monthly basis.

Another example is buying a new car at 0% interest that is available from 36 to 60 months depending on the manufacturer or taking the alternative significant discounts.  Either approach allows you to buy a more expensive vehicle that you would not have considered before at a lower or equal monthly payment.  You might even want to consider it, if you still have a loan on a car with an interest rate over 5%.  Even trading in a car with a negative equity might be viable, because of the savings from the lower interest or discount might allow you to pay a similar monthly payment for a newer car.  (I suspect that incentives might even get better later in December to reduce yearend inventories and again sometime in the Spring 2002 for tax refund purposes.)

And while I am not suggesting that we all go out and spend what we cannot afford just to say it was a good deal, there are those who should be able to take advantage of these good things . . . which in turn will assist economic recovery.

David G. Bancroft
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