Interest
| Interest In the Torah, it forbids loaning money out for usury. The Muslims interpret this to mean that no interest should be charged on loans. In medieval times, Christians followed this rule and did not loan money with interest. This allowed Jewish bankers to do so, and they were patronized by many kings and noblemen. By the thirties in the U.S. interest rates were modest, 4-6%, and many states had usury laws, like Pennsylvania’s capping the highest rate that could be charged at 8%, although “finance” companies like Household Finance could charge up to 30%. Generally, interest rates should cover the rate of inflation, though so far in the early 21st century, interest rates paid on savings accounts are below the inflation rate. In the late 20th century. usury laws were repealed, and with the advent of bank credit cards, interest rates of 20-25% are common. |
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