Why? Seriously…why do they think this is a good idea? Just teach FINANCIAL LITERACY and have regulation around CC qualification. Predators shouldn’t be allowed to continue to prey. Changing the int rate will do nothing.
This is what I think is so insane sometimes with democrats, they think this is a win. It's another distraction so they can gut services. Low income earners do not use CC's. They use cash advance stores. snap out of it democrats.
You are proving my point brother. How about we watch the top 1 percent get their taxes cut again while we mess with CC percentage debt. That is what we are doing, can you believe it? We fall for this every time.
The result could be that, now, there is no credit rationing by credit card companies (very few turned away). A cap, however, would encourage rationing, which could force those who need credit to pay even higher interest rates. This paper explores this possibility: https://www.bankofcanada.ca/wp-content/uploads/2010/02/wp05-7.pdf
Look for a 15 minute meeting in the future with the heads of Citi, Chase, and Cap One, followed by a press conference in which Trump proclaims that he is the smartest person in the world, just learned all about credit cards, and now realizes we can't do this.
I’m all for a cap, but would it make more sense to tie that cap to the fed rates? Also wondering how a cap would affect who banks are willing to approve for credit.
Excellent goal to eliminate "loan sharking" for many Americans, but the free market challenge is this will also deny millions of low credit score folks the use of credit cards, as banks cancel cards and deny applications.
A lot of people are approved for credit cards that absolutely should not have them, but there does need to be a better way to build credit when you’re young
This specific aspect of the proposal is probably okay — and maybe even the primary social benefit — because these programs largely represent a transfer of wealth from those who are financially struggling to those who are not.
Financial hardship isn’t a constant thing. It’s generally something people enter into; and when the cards aren’t stacked against them, emerge from. It’s easy to have a credit score of 800 one day, and then lose your job or accrue giant medical debt the next.
This isn't about medical debt. It's about credit cards.
Anyway, we can agree to disagree as I can tell you won't be persuaded and arguing on the internet is pointless. I fundamentally disagree with your perspective.
Regulating payday loans also theoretically decreases access to credit, but if anyone has played RDR2, they may have an idea why credit to marginal borrowers might not be a social good
I mean, I guess, but I also think a cap at 20% for consumer loans wouldn’t be socially detrimental, and am not convinced 10% wouldn’t ultimately be beneficial.
I totally disagree. Maybe stop giving people with questionable financial backgrounds 5k limits? Or raising them without asking? Or maybe, just maybe, change our credit system. I got my first card at 25. Im 37, i still get remarks that “length hurts my score”, paid cash until 25, never a late payment
Or…the price of things will have to come down, otherwise consumers won’t spend, because they literally can’t. Credit cards are part of the reason why things are so expensive. Credit in general. Car loans used to be 3 years, then 5 became normal &now it’s 7. The credit industry needs to be reigned in
Deflation hurts people with assets, so overwhelmingly rich people. Deflation of commodities happens all the time, and it doesn’t mean a spiral of general deflation would happen. Also right now, we are headed for stagflation which is arguably just as bad.
Get where you're coming from, how do you do credit cards ethically? But having worked in credit card accounting, it's the first thing people stop paying in a downturn. Default rates are multiples of other credit products. Jason is right, banks would drastically raise the credit ratings reqd
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Anyway, we can agree to disagree as I can tell you won't be persuaded and arguing on the internet is pointless. I fundamentally disagree with your perspective.
Payday loans also have a whole host of other issues.
https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=3026&context=cowles-discussion-paper-series
Some would need to declare bankruptcy, others would have to reduce spending.
This could be catastrophic.
Potential for a huge economic implosion.