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Why are credit card interest rates so high?

Hello hello, Apexians. I’m writing to you from the windy waves of Shasta Lake in northern California. Kim and I have been here for a couple of days, basking in the sun and the water with her brother and nephews. We’ll be here for another 24 hours before heading home.

But while we’re at the dock refueling, I have just enough time to write up this Monday installment of Apex Money. Here are a few of my favorite recent money stories. I think you’ll like them too.

Why are credit card interest rates so high? [A Wealth of Common Sense] — “There have been some slight dips over time but credit card borrowing rates remain firmly entrenched at double-digit levels. And while interest rates have been falling around the globe in recent years, credit card borrowing rates have risen. There are a number of reasons people point to for the stickiness of credit card rates…”

Peers’ income and financial distress: Evidence from lottery winners and neighboring bankruptcies. [Federal Reserve] — “We examine whether relative income differences among peers can generate financial distress. Using lottery winnings as plausibly exogenous variations in the relative income of peers, we find that the dollar magnitude of a lottery win of one neighbor increases subsequent borrowing and bankruptcies among other neighbors.”

The joys of compounding. [The Rational Walk] — “Gautam Baid’s new book, The Joys of Compounding, is destined to become a must-read investment classic. Baid does an excellent job of taking several steps back from financial analysis and relating how his life story shaped who he is as an investor, how seeking a broad-based education and the ‘worldly wisdom’ that comes from it formed his intellectual foundation, and only then describing how this has translated into financial independence through intelligent investing.”

Your relationship with self-worth and money is complicated. [Financial Best Life] — “Your relationship with money should be about your financial goals and feeling good about your choices. If you have what you need, love your job, and have found happiness, then what other people think should not matter. The reality is that it can be hard to maintain that mindset and other people can affect our emotions.”

Normally I’d include some sort of fun video, but not today. Sorry. Our cell service out here on the lake is so poor that I don’t want to risk not getting you your links by taking too much time to find fun stuff on YouTube. (And the same might be true for Tuesday’s links!)

I’ll be back tomorrow with more great stuff! See you then.