Why do they raise the interest rate?

[crazytimes]

I just read they might raise it again! Every they have done this, my student loan and CC interest goes up! I knows it's not much, but my one loan has increased by 2% interest in less than a year. I just don't understand why they do it because it obviously hurts people with loans or credit cards. Are there any types of loans that aren't connected to this "interest rate" they keep raising? And how come the savings account rates don't increase...I know ING is over 3%, but that's nothing when you are paying 17% CC interest LOL! I'm sure it's beneficial in some way, I'm just not "getting it."

And why DO the CC companies, etc. often base their interest rate on it?

[hmsram]

I hate that student loan rates may go up...and what makes it harder is that here our college fees are going up to in the entire state of Louisiana. We just had a rate increase last semester and now another this semester

While it does not make me happy to see the increases there is nothing I can do because if I want to keep going I will just have to deal with the increases...I do get grants which do not cover my full tuition so I am grateful for that , as for the portion I have to pay I just try to pay it all up front if I can for that semester.

[mrbowler]

This gives a basic explanation of interest rates...

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This site is good for credit card info:

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