The bailout of our banking system, considered a short-term solution by many experts, could end up costing you big in the long-term. Of course, there’s the $700 billion required to buy up bad mortgages, but there are also a host of potential costs that you may not be aware of.
First, you should probably expect some sort of increase on your income taxes. Adding $700 billion to our already bloated budget could potentially leave the government with a trillion dollar deficit. Reducing that without raising income taxes won’t be easy.
You may also incur higher banking charges, on everything from checking accounts to overdraft fees. Part of the reason is that banks want to recoup their losses.
And you’ll even find higher rates on loans for the same reason… banks trying to make up for money they’ve lost… and less competition amongst fewer banks will make it easier for them to do so.
None of these things have happened yet, and perhaps never will, but it’s unlikely that this big of a bailout, with this much reduction in competition, won’t have any effect.
Sign up for our free newsletter
Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.