The Downside of Lower Interest Rates | Adweek
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The Downside of Lower Interest Rates

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Every silver lining has its cloud, apparently. For many people, one saving grace of the current economic slump is the fact that interest rates have come down. A Gallup poll reminds us, though, that a decline in rates is not an unmixed blessing.

Eight percent of adults said lower rates help them "a lot" and 27 percent said these rates help them "a little." But a significant number said lower rates hurt them either a little (14 percent) or a lot (6 percent). Most of the rest said they aren't affected one way or another.

The numbers are particularly negative among Americans age 65 and older, for whom interest income is often a significant part of the financial mix. About one-third of people in that age bracket said lower rates hurt them either a little (22 percent) or a lot (10 percent), outnumbering those who said lower rates help them a little (21 percent) or a lot (7 percent).

Lower interest rates can also be a disincentive to saving, as if Americans needed one of those. Asked to say how the amount of money they save has changed (if at all) during the past year, few said it has risen a lot (3 percent) or even a little (10 percent). Nearly half said it has declined a little (21 percent) or a lot (27 percent), with most of the rest saying it hasn't changed either way.