What is the credit crunch?

[Slade]

So I am on a bit of an article spree today :)

Just found this one that I figure may be useful to those of you who aren't sure what is happening in global markets that is causing so much turmoil.

The credit crunch explained | NEWS.com.au (http://www.news.com.au/business/money/story/0,25479,24100335-5017313,00.html)

So, how are you affected by the credit crisis? directly? Indirectly? Are you doing anything to combat it?

[The Y-man]

Main effects seem to be Interest Rates - getting high.

We have sold of some of our investment assets to pay of our most expensive loans.

We are actually rolling over credit card bills, as CC companies offer very attractive rates (eg 7.99% for life of loan at AMEX). This is cheaper than our home loan (almost 9%), so it makes sense to use the money that would have paid the cc off, to go into the pricipal of our home loan instead.

Cheers,

The Y-man