An inquirer to the Christian Science Monitor’s financial blog “The Simple Dollar” poses this real life scenario:

“I’m 22 and have very robust finances…My dad recently suggested to me that instead of paying his credit card company interest (~20%, he thinks) on his balance (~$4000), I could lend them the money to pay it off in exchange for something like 10%….This is money I can afford to lose, and would otherwise be sitting in a money market or bond index fund. So my question: is it unethical to charge my parents interest, at least more than I’d earn otherwise? While 10% is much lower than their current payment, it’s much higher than I’d earn otherwise. If I’m willing to lend them the money at a lower rate, am I ethically obliged to?” Continue reading →