Cheap Money

Filed Under » , , ,
Dictionary Says

Definition of 'Cheap Money'

A loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but bad for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds. Cheap money can have detrimental economic consequences as borrowers take on excessive leverage.

Investopedia Says

Investopedia explains 'Cheap Money'

When money is cheap, it is a good time for borrowers to take on new debt or consolidate existing debts. However, borrowing more than one can afford to repay was one of the primary catalysts of the 2008 recession.

Here are a few examples of cheap money:

-A credit card with a 0% introductory APR for 12 months

-A 30-year fixed-rate mortgage at 4% interest

-An auto loan at 0.5% interest
Search results for

'Cheap Money'

  • The Dangerous Lure Of Cheap Out-Of-The-Money Options

    http://www.investopedia.com/articles/optioninvestor/10/lure-of-cheap-options.asp
    The Dangerous Lure Of Cheap Out-Of-The-Money Options. March 04 2010 | Filed
    Under » Futures, Options. It is often said that the financial ...

  • The Plaza Accord: The World Intervenes In Currency Markets

    http://www.investopedia.com/articles/forex/09/plaza-accord.asp
    ... Cheaper money for the Japanese meant easier access to money along with the Bank
    of Japan's adoption of cheap money policies such as a lower interest rate, a ...

  • The 2007-08 Financial Crisis In Review

    http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp
    ... Cheap money, once out of the bottle, always looks to be taken for a ride. ... It
    wasn't long before things started to move just as the cheap money wanted them to. ...

  • 7 Tips To Move On The Cheap - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1211/7-Tips-To-Move-On-The-Cheap.aspx
    ... along a friend or relative who's skilled in the art of negotiation to act on your
    behalf, and secure you a cheap moving truck rental fee. The money you save ...

  • Cheap Steps To Reduce Your Carbon Footprint

    http://www.investopedia.com/articles/pf/09/small-steps-reduce-carbon-footprint.asp
    Cheap Steps To Reduce Your Carbon Footprint. ... It's true that a full solar panel array
    will save you money in the long run, but the startup costs - ranging from ...

  • Save Money On Summer Bills

    http://www.investopedia.com/articles/pf/08/save-money-summer-bills.asp
    ... Related Articles. 5 Items That You Shouldn't Buy Cheap Alternatives Of. You ...
    Read More »; How To Save Money At The Grocery Store. With ...

  • Travel Tips For Keeping You And Your Money Safe

    http://www.investopedia.com/articles/pf/06/traveltips.asp
    ... Consider carrying two wallets. One should be a cheap wallet or money clip containing
    a handful of small bills and a few expired credit cards. ...

  • How Did Italy Get To This Point? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1211/How-Did-Italy-Get-To-This-Point.aspx
    ... With access to cheap money, the Italian government borrowed aggressively
    and used the borrowings to fund public largesse. While ...

  • 5 Money-Saving Ways To Lose Weight In 2012 - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0112/5-Money-Saving-Ways-To-Lose-Weight-In-2012.aspx
    ... Remember that cheap doesn't necessarily equal value. If you spend $50 per week on
    a personal trainer, that's $2,600 per year. That's a lot of money, but what ...

  • OM Group - Unreasonably Cheap, Or Cheap For A Reason?

    http://stocks.investopedia.com/stock-analysis/2011/OM-Group---Unreasonably-Cheap-Or-Cheap-For-A-Reason-OMG-FCX-SOA-ALB-GB-STP-SCCO-AMSC1115.aspx
    ... OM Group - Unreasonably Cheap, Or Cheap For A Reason? ... that this remains a
    cobalt-centric story and these diversifying acquisitions go down as a waste of money. ...

Related Articles

Partner Links