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If youreborrowing money, theyre a burden you tolerate until rates fall and you might refinance.
But those without a savings cushion must borrow their way out of expensive emergencies.
Toxic borrowing is often the only option and high interest rates always increase the toxicity.
There arefew good optionsin these situations.
Non-profit credit counseling, debt management plans and bankruptcy are often the only ways out.
But the damage to credit scores and financial stability has already been done.
Those living on the financial edge rarely have those options.
They face far more daunting choices.
When interest rates rise, minimum payments on debts also rise.
Our firm works with many clients struggling under massive credit card debt and high-interest personal loans, Rawal said.
But when interest rates rise, their debt gets more expensive and gobbles up those crucial few extra dollars.
As a result, the financial burden falls disproportionately on the poor, who often have less flexible budgets.
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