Why should credit card interest rates be less than 30%?

[TwixVoy]

Now of course I realize many people have gotten in over their head and a rate reduction will help them. I support that.

Beyond that, however, my question is - why is the solution to credit cards lowering the rates considerably?

Obviously this will only serve to perpetuate credit cards on the citizenry further. It sends the message "Ok, now you can be sure if you go out and buy consumer goods on credit you won't have to worry about a high APR!"

Shouldn't the message be "Don't buy consumer goods on credit. Don't use credit cards to the point you carry a balance and have to worry about the APR" ?

Here is my solution -

Make it EASY AS HELL to declare bankruptcy and wipe out credit card debt on a whim. Make it clear in no uncertain terms banks will NOT receive federal help to cover credit card losses. This will make banks think twice before allowing people to get to the point they can't get out of credit card debt.

Then CREATE JOBS and make them PAY HIGH ENOUGH WAGES so that people don't have to use credit cards to survive.

To me that seems like a much better solution than "Ok your rates are locked in at a low APR! Go finance your life further while your wages don't keep up".

[Stellabella]

1. One word:

Usury.

[Matariki]

2. Usury laws

look it up.

or if you want to get biblical: "The rich ruleth over the poor, and the borrower is servant to the lender" -- Proverbs

[robinlynne]

3. People should not use credit cards unsafely. that is a fact. BUT given the fact that sometimes

people need to, for health, vacation, survival, whatever, and the interest r ates in the country right now are at around 2%, 2.1 at my bank for a one year CD, why shouldn't credit card interest be 3%?
It is also bad to use gasoline, but and do you support the greed of the corporations? I don't I want cheap gas, and I am perfectly willing to buy an electric car as soon as there is one available I can afford. Should we let gasoline cost 30.00 a gallon because gasoline is bad for the earth?

Greed, price gouging are wrong, whether or not you think people should use the product the companies are price gouging on. Two different subjects, not connected.

[TwixVoy]

6. You are missing the point

You say "health and survival". People should not have to use freaking credit cards for those things! That is my point. Instead of finding a way to ENABLE credit cards to continue to be used, how about solving those issues instead? How about single payer heatlh care? But it seems the solution is "Let's make credit cards low rate so people can be in debt to us... just at a lower feel good rate"

The fact is you are still putting people in debt to banks be the APR 1% or 50%.

I am in favor of keeping credit card rates sky high simply to discourage peoples desire to view them as a solution to high health care costs and basic survival.

Credit card interest rates should not be 3% because it will ENABLE people to get in to MUCH more debt with out even realizing it.

[robinlynne]

32. again thses are TWO separate ISSUES. youa re missing the point. The point is corporate greed.

[TahitiNut]

4. Once upon a time, credit card interest was deductible on federal income taxes.

... and there were usury laws on top of that.

:shrug: Charge!!!!

[dkf]

42. And they were a lot harder to get too.

We need to go back to those days. Credit card standards need to be tightened up a lot.

[RomanHoliday]

5. I have a 700 credit rating and I ALWAYS pay on time..

..but I've never had a gigantic emergency happen to me. You never know, an illness or surgery or accident could require that you spend a shitload of money that you can't pay off at the moment.

[TwixVoy]

8. With your 700 credit score

you should be able to easily get a personal loan with fixed terms to pay for such things. So why would you even think of putting it on a credit card knowing the terms are subject to change at any moment?

This is the problem the country has. You (and millions of others) see a major health emergency as being solved with a Visa card. Instead we should be finding ways to make such things not require a person to be wiped out financially or have to go in to major debt.... but the "solution" that is being offered now is low credit card rates so that the cycle can continue.

[Hannah Bell]

16. scuse me, i had a 753 credit score + no violations & got turned down for a *car insurance* policy.

supposedly because my credit score was "too low".

the whole industry is OUT OF CONTROL.

[TwixVoy]

29. Good for you

was that a FICO score? If not it was not your true credit score and was likely BS generated from wherever you bought it from.

The fact is no one is getting turned down for personal loans with a 700+ FICO score. The ONLY exception being high debt to income, no wages, etc.

And if that car insurance company turned you down for that reason they must have DAMN few customers. According to FICO.COM only about 10% of americans have credit scores higher than 760. Therefore that company has limited their business to 10% of the populace. Pretty damn stupid on their part.

[Hannah Bell]

39. yes, it was fico. no, i didn't buy the score from "free credit report.com,"

i got it from equifax, my yearly free report.

yes, i was turned down for car insurance, by a big, well known auto insurance company, & the stated reason was that my credit score was too low.

i wasn't the only one, & there was a lawsuit.

ps: my payout as participant in the winning class action suit was: free credit report for one year.

there's justice for you.

google around; there are many such lawsuits over abuse of credit reports. it didn't make sense to me at the time, either, but it happened. if you don't believe me, tough shit.

[Double T]

7. The 'OWNERS' have always liked and promoted slavery; indentured and otherwise.

Isn't it time to make certain the 'OWNERS' aren't the only ones that have 'rights' which have led to massive abuses?

[TwixVoy]

9. So you think being a slave

to a bank at 30% APR is any different than being a slave at 9% APR?

Once you get your self in debt to a bank you are a SLAVE to them at any APR. The lower APR simply gives a the impression of being slightly less of a slave, but still a slave.

[CoffeeCat]

12. You are spot on...

We don't own any credit cards--because we don't want chains around our ankles.

No one owns us. When we want something--we save for it. We don't go on vacation, or go shopping or buy a car, unless we have
saved and pay cash.

I'm sure some find that a little weird. However, what's really weird is that American citizens have allowed themselves
to be robbed blind by these greedy companies--just so they can purchase stuff.

People didn't use credit cards before the 1950's. Credit cards didn't exist. Yet people survived. And they were approved
for mortgages, home loans and other personal loans--without a credit card. Oh noes! What will happen to my credit score if
I don't use credit cards? We qualified for a mortgage and primo rates--without owning any credit cards.

Credit card companies have convinced Americans that their FICO score should determine their self worth. What a joke.

Credit card companies are evil and doing business with them is not smart.

[Hannah Bell]

17. no, they didn't "convince americans" any such thing. they just DID it.

i have one credit card which i originally got in order to establish credit to buy a house, in my thirties. i buy maybe 2 things a year with it & pay it off immediately. spotless credit, high score.

turned down for auto insurance (no violations) - supposedly because of my "low" (753) credit score.

they didn't convince me of anything. They just DID IT. It wasn't the people who decided credit scores were a measure of worth, it was THE CREDIT INDUSTRY, the GOVERNMENT, & then the landlords, employers, insurers, etc. who adopted the standard.

and to add insult to injury, people can't even access THEIR OWN REPORTS more than once/yr (which they had to fight for) without PAYMENT.

[dkf]

43. If credit cards = slavery, why do people get them?

I say get one card and pay it off every month. That is the only way to use these things.

Everyone should have an emergency fund equal to 3 months pay at a minimum.

[flvegan]

10. So you're against a low APR credit source?

You don't really "get" credit, do you? I'd like to see your world with an APR on a mortgage of 30%. Or a car loan with an APR of 30%. Oh, wait...a small business loan of 30%. Yeah, that'd be good. Enjoy your world where racking up debt to be wiped out by a bankruptcy "on a whim" exists.

I'm glad you're not running anything.

[TwixVoy]

11. Damn right I am

I am against low APR as a means to finance basic consumer goods.

You bring up a business and a mortgage. THOSE ARE NOT REVOLVING DEBT! Do you know the difference between installment and revolving loans?

Enabling people to use revolving debt to finance consumer goods at ultra low rates is a recipe for disaster.

[flvegan]

19. You: "Don't buy consumer goods on credit."

Consumer goods being anything tangible that's "used" by the purchasing individual, like a car yes? It also appears that you don't quite get "revolving debt" either.

Good for you.

[TwixVoy]

24. Nope

Car loans are installment loans. No one buys cars on a credit card.

You know damn well what I mean by consumer goods. Credit cards are designed to let people FINANCE everything from the gallon of milk they buy to a big screen TV. If you think that is a good thing for anyone but the banks you are either a fool or take home a paycheck from a bank.

[flvegan]

30. So then you really don't get the terminology.

Your personal attacks aside, I find humor in your post.

[dkf]

44. My mom put her Camry on her credit card.

She wanted the miles and paid the thing off in cash.

[TwixVoy]

47. Then she didn't buy it on a credit card did she?

You know full well I was talking about someone putting it on a card and carrying the balance from month to month.

[dkf]

48. Neither she nor I like to carry balances.

Nor do a lot of people I know.

Carrying a balance on a credit card is nuts. Its the highest interest payment out there.

[CoffeeCat]

13. Oh please...that's a load of bull....

...that's what the credit card companies want you to think---that you need a lot of credit cards and lots of on-time payments
to get a great FICO score--which they say is the only way to get a good interest rate on a loan.

That's so untrue. It's urban legend.

We secured a mortgage at the lowest rate possible--with no credit cards, no car loans. We had a steady income and both
of us had worked at our jobs for more than 10 years, and we had a good rental history, always paying on time.

We got a mortgage. You don't need a credit card to get a mortgage or a good interest rate.

Anyone who tells you that is wrong or is shilling disinformation for the credit card companies.

[flvegan]

20. What specifically that I stated was a "load of bull...."?

Enlighten me.

[TwixVoy]

25. You know for some reason...

I have a feeling you are in massive debt at the moment.

[flvegan]

33. Do you?

Your "feelings" might well fail you then. But, I have a "feeling" that you don't really understand finance, economics or anything else beyond pulling cash out of your wallet.

I also have another feeling that I'll keep to myself, per DU's rules.

[leftstreet]

14. You honestly believe high interest rates will lead to higher wages?

I'm not seeing the connection here.

:shrug:

[Hannah Bell]

18. higher wages for financiers, which is all that seems to matter these days.

[TwixVoy]

23. Never said that

Simply said ultra low rates will simply encourage more financing of consumer purchases further putting people in to debt to banks. The best solution is to make credit cards look like shit.... not tempt people with low rates.

[lordsummerisle]

15. Isn't there a happy medium here

between 3% and 30%...what about 15% as Bernie Sanders is advocating?

[Yavin4]

21. Easy Access To Credit = No Pressure to Form Unions

Give the populace easy access to debt so that they can buy cars, finance their education, pay for healthcare, buy a home, etc., and they won't join a union to collectively bargain for better wages and health benefits to pay for their cars, home, education, and healthcare.

[TwixVoy]

28. Bingo

People have learned to substitute low wages with consumer debt.

[Toucano]

22. Because USURY is IMMORAL?

Because since THE DAWN OF CIVILIZATION, the ability to earn GROTESQUE profit by doing NOTHING, and contributing NOTHING has been a well-recognized ANATHEMA to justice and a healthy society?

Your solution is ignorance based on brain-washing of a Republican, libertarian conceived consumer driven society!

Interest rates do not drive demand for much of the purchasing consumers NEED to live.



In reality, high interest rates SUCK MONEY out of the economy to the unique benefit of ONE SECTOR: Lenders.

Manufacturers, producers, and all workers SUFFER when dollars that should be available to reinvest in capital and wages is SUCKED AWAY to pay fat-cat BANKERS grotesque interest!


Look at the views of Plato, Socrates and Aristotle if you doubt that the permission of usury is the cause of most of the modern world's suffering.

Now imagine all those people paying 30 percent or more are suddenly paying 15 percent or less. Where does the money go? To "finance a life"?

Yes.

That money pays for an education. It pays to buy something somebody WORKED to make. It pays for medical care for someone who is sick. It buys food for someone who is hungry. It lets someone start a new business.

In your grand scheme, it will not buy an education. It will not pay for something somebody worked to make. It will not make someone well, and it will not feed someone.

It will go into the coffers and the fat belly of a banker where it will be retained or relent, at the same grotesque interest rate, to some other sorry-assed bastard, thereby sucking more money out of the system to the benefit of the elite few.

A federal law prohibiting usury is vital to an economic recovery and shared prosperity.

[TwixVoy]

26. The goal is not to prevent usury

it is to further enable people to finance every aspect of their life.

Rather your rate is 3% or 30% you are still a slave to the bank the moment you swipe that card.

[Toucano]

31. Speak for yourself.

You are dead wrong and could benefit from a bit of education on the subject.

Not to be cruel, mind you.

But you are mistaken.

[dysfunctional press]

27. people don't HAVE to use credit cards to 'survive'...

the proof of that is the number of people who survive just fine without them.

people CHOOSE to use credit cards to do more than just survive.

[Toucano]

34. Congratulations. You have completely missed the point. n-t

[dysfunctional press]

35. i don't think so...

but i KNOW that i wasn't responding to your post, anyway.

[Toucano]

36. Welcome to a 21st century discussion forum!

Post your misinformed thoughts, be corrected! :)

No discrimination, favoritism, prejudice or precedent!

[dysfunctional press]

37. since it wasn't you making the original point of the original post...

i don't recognize your claim to be the one to decide who does or doesn't get it.

sorry. :hi:

[Toucano]

38. I don't recognize your right to refuse to recognize that you don't get it.

So there!

[dysfunctional press]

40. oh, well.

it doesn't change he fact that nobody HAS to use credit cards to survive.

[Toucano]

41. A true statement.

And completely beside the point.

Thanks for being so good natured! :)

[dysfunctional press]

46. how is it completely beside the point...?

enlighten us...if you can...:shrug:

[The River]

45. Living Proof

I have lived without credit for over 10 years now.
Credit score is ZERO. Not a single entry on it.
I've saved a few thousand each year since on the
interest I never had to pay to the CC companies.
It's enough to support myself for a few years if need be.
Good thing too, my job disappeared last week.