Interest Rates

Refinancing today is not the same game it was a few years ago, when homeowners with even a modest amount of equity and just so-so credit could score a great loan. You now need good credit, lots of equity and very little outside debt. "These are very traditional lending standards, but they're going to come as a shock to anybody who has only been in the market for the past 10 years," said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, N.J., publisher of loan information.

Even in the best of times, carrying a balance on your credit card is a risky -- and costly -- proposition. These days, it can be downright foolish, at least if there's a chance you might miss a payment or two. Millions of cardholders have recently received letters from the likes of Citibank, Bank of America Corp., Wells Fargo & Co. and American Express Co. notifying them that their interest rates are going up, in some cases to 30% if a single payment is missed. JPMorgan Chase & Co.

Banks are quietly changing the terms of millions of credit card accounts as they brace for a tough new law that will limit rate hikes. The law would restrict interest rate increases unless a credit card has a variable rate. So at least two major lenders are switching their cards with fixed rates to -- you guessed it -- variable rates. "It's completely unfair," said Linda Sherry, a spokeswoman for Consumer Action. "It's an end run around the intent of the new law."

Leave it to the banks to try to turn passage of credit card reform legislation Tuesday into bad news for many cardholders. Here's the deal: Banks are basically saying that because they're going to have to change some lending practices to comply with the bill, they'll be facing greater risk.

Since the beginning of the year, millions of credit card customers have been hit with higher interest rates -- in many cases from lenders that have received billions of dollars in bailout cash from taxpayers. Sen. Bernie Sanders, a Vermont independent, responded last week with legislation that would impose a 15% cap on rates for all consumer loans, including plastic. And you know what? It just might work.

Van Nuys resident Richard Levinson figured he was getting a pretty sweet deal when JPMorgan Chase & Co. offered to charge an average 4.5% in interest if he'd transfer his outstanding credit card debt to the bank. Levinson, 54, a musician, planned to use the Chase account as a rainy-day fund that would cost relatively little to maintain. "I work in an industry where I can never be sure of my income," he told me.

Despite sub-5% mortgage rates and signs that home prices have bottomed out in some places, executives and economists are decidedly downbeat about the future of the country's mortgage industry as well as the housing market it depends on. The Mortgage Bankers Assn. said Tuesday that it expected home foreclosures in the U.S. to continue to rise before leveling off late next year. The reason: Job losses have replaced adjustable subprime loans as the main cause of defaults. Jay Brinkmann, the group's chief economist, predicted that unemployment would rise through next summer, causing delinquencies to rise.

Mexico's central bank surprised analysts and slashed interest rates by three-quarters of a point. The Bank of Mexico defended its decision, arguing in a statement that the worsening global economic crisis, especially in the industrialized world, "is significantly affecting financial markets, capital flows and the development of emerging economies." Friday's action brought interest rates to 6.75%.

New federal protections for credit card users go into force today, but in advance of the tougher rules, banks have been raising fees and interest rates -- hoping to ensure that one of their historically most lucrative businesses remains that way. Since Congress approved the landmark credit card overhaul legislation last spring, many issuers of plastic have jacked up interest rates, switched accounts from fixed to variable rates, and raised annual...

Federal Reserve Chairman Ben S. Bernanke, acknowledging that slumping employment and continued turmoil in financial markets pose mounting threats to the U.S. economy, said Thursday that the central bank may be ready to make "substantive" interest rate cuts to avoid recession. Bernanke's comments in a speech in Washington suggested that the Fed would slash its key target interest rate by half a point from its current 4.25% when it meets this month.