Posts Tagged ‘Interest Rates’
» posted on Wednesday, December 2nd, 2009 at 8:22 pm by Damien Baldino
Usury bill would cap credit card rates at 16% and have additional costs
Representatives John Tierney and Michael Capuano will be introducing a bill which would force credit card companies to cap their rates at 16%. I know a lot of people will think this is a fantastic idea. After all, to these people, banks are evil, and people are blameless for their situations. This bill embodies the bank as aggressor, borrower as victim stereotype, so it should find broad support, which is unfortunate.
If borrowers make intelligent decisions, they can move their business away from high-interest credit cards to low-interest cards. As a result, those banks with excessive rates would suffer financially. Of course, choices would be limited for borrowers with bad credit, but whose fault is that? The borrowers obviously, but I suspect that you won’t see many people on Capitol Hill hold individuals responsible for their decisions. After all, many voters don’t want to hear the truth. » read more
one Comment | filed under Business · Politics | tags: Credit Cards, Interest Rates, Usury
» posted on Wednesday, November 25th, 2009 at 8:46 pm by Damien Baldino
Can a bill to cap interest rates result in higher interest rates?
Congress has a new idea: Pass a law that would force credit card companies to cap their rates at 16%. I have little doubt this will will get lots of attention, and will probably pass. On one side you have the big, evil, bail-out accepting banks, and on the other, the hard-working American who is struggling to make ends meet in this tough economy. That’s the way it will be presented, but it’s far from the truth.
Interest rates are determined by several factors, which equate to the borrowers risk profile. Those with excellent credit pay less than those with poor credit. It’s a fair system, since those with poor credit are more likely to default. For example, someone with excellent credit might pay 12%, while someone with poor credit would pay 20%. The difference might not seem fair at first, but let’s not forget that based on their payment histories, each deserves the rate they received. » read more
post a comment | filed under Business · Economy · Politics | tags: Credit Cards, Interest Rates
