how do high interest rates affect consumers 
interest rates represent the cost of borrowing money when interest rates are high that means borrowers must make higher payments for mortgages cars credit cards and other loans interest rates also affect how much businesses must pay for machinery rent and new products which are often purchased on credit when interest rates are high businesses may reduce their operations and downsize their workforce contributing to higher unemployment the bottom linein financial industries the net interest margin reflects the difference between the cost of borrowing money as opposed to the gains from lending money banks and credit unions typically borrow money from their customers in order to finance loans to their clients and that difference represents how effectively a company uses its lending capital 