You'd think an interest rate of 25% would be illegal, wouldn't you?
Well, read the fine print on this sign (ok, so you can't read the fine print - but trust me, it says that the annual interest rate is 25 point something percent).
I saw this in a large furniture retailer today. What set me off was the table of weekly repayments. You buy something for $4000, and then you make weekly repayments over 4 years of $38.42.
Thankfully, I went to school in the 1980's, so I can do sums in my head. Let's see - 4 years times 52 weeks is 208 weeks. 208 times $38.42 is...... way, way, way above $4,000. Closer to $8,000.
Actually, $7991.36, but my storeside maths was good enough.
After the shock wore off, I read the fine print, and that is where I found the 25% interest rate, courtesy of HSBC. Plus a monthly fee of $3.60 (I think) and an establishment fee.
You put that together with this story on home equity withdrawl in the UK, and you can see why so many people owe so much money, and why it is going to be some time before they have paid it down to the point where they can start spending again.