Page 1 of 2 12 LastLast
Results 1 to 10 of 17

Thread: AOC and Sanders call for capping credit card interest rates at 15%

  1. #1
    Join Date
    Tuesday, October 1st, 2013
    Last Online
    Today @ 7:06 AM
    Posts
    22,365
    Post Thanks / Like

    AOC and Sanders call for capping credit card interest rates at 15%

    AOC and Sanders call for capping credit card interest rates at 15%
    by Colin Wilhelm
    | May 09, 2019 01:14 PM

    Bernie Sanders and Alexandria Ocasio-Cortez will introduce legislation to create a national cap on interest rates for credit cards.

    The Sanders-Ocasio-Cortez legislation would limit credit card annual percentage rates to 15%. Current credit card annual percentage interest rates typically range from the mid-teens to high 20s, depending on a person’s credit score.

    “Every major religion on Earth ... has condemned usury because it is really disgusting,” said Sanders, a Vermont independent senator who is also a leading candidate in the Democratic presidential primary. “What Alexandria and I are proposing in this legislation is not complicated ... Bringing back the concept of usury laws, where banks cannot try to get blood out of a stone.”
    While this seems useful at first glance, I don't think it really is when you think about it. Credit card companies are essentially making bets: you bet you'll pay it off before the interest kicks in or within a very short time, they are betting that you will make the minimum payments. If interest is capped, why wouldn't companies severely restrict credit to make a safer bet? Better to get 15% from customers who always pay on time and are never late than to extend credit when the customer has a spotty work history or has too many late payments which could end up in collections.

    I remember when credit was difficult to get. You had to start out with a store card (Sears was our credit foundation). You bought one item a month and paid it off. Everything else was cash or check.

    This would also impact small business since a lot of starting business owners use credit cards to float their initial investments. A huge number of businesses fail within 18 months but not all. Without that access to money, how many can afford to start? Many are very small initially - they can't get a bank loan.

    How many people will be cut out of credit with this scheme? Sure, the lower middle and working class can go back to cash but what would be the impact? Not the "we can't go on vacation" thing but the "we can't help buy your food truck" thing?

    Wash Ex
    "Alexa, slaughter the fatted calf."

  2. #2
    Join Date
    Saturday, January 3rd, 2015
    Last Online
    Today @ 5:55 AM
    Posts
    12,481
    Post Thanks / Like
    I'm on board with it. Back in the day, there was a term for anyone who would charge a 25% interest rate.

    Loan shark.

    Mark
    Race Card: A tool of the intellectually weak and lazy when they cannot counter a logical argument or factual data.

    "Liberals have to stop insisting that the world is what they want it to be instead of the way it is." - Bill Maher

    Political correctness is ideological fascism. It’s the antithesis of freedom. Dr. Piper

    Gender is not a "Social Construct", it is an outgrowth of biological reality.

  3. #3
    Join Date
    Tuesday, October 1st, 2013
    Last Online
    Today @ 7:06 AM
    Posts
    22,365
    Post Thanks / Like
    Quote Originally Posted by 80zephyr View Post
    I'm on board with it. Back in the day, there was a term for anyone who would charge a 25% interest rate.

    Loan shark.

    Mark
    But why do loan sharks exist? If everybody is frugal, manages funds responsibly, lives below their income, and never needs immediate money, why do these instruments exist?

    The answer is that people don't live that way.

    We are getting rid of payday loans out here because they prey on the poor. Well, yes and no. If you get one to pay for keeping your beater car running so you can work, it's a good deal. I mean, if you are in that position there is obviously no family member or friend you can tap for that radiator replacement. What are you going to do? Quit your job?

    If you use them to buy drugs or alcohol, obviously that's stupid.

    So, we jettison the really needy to protect the abusers?

    I've been poor. While much is self-generated, some isn't. All these 'predatory lending' things look awful to people who will never have to use them but they do serve a purpose - just like old school loan sharks.

    Yes, people use this stuff badly. Not everybody does.

    Now, we can go back to cash and carry. I could easily as could many here could but that isn't true of a lot of people. They can make minimum usury payment but they can't pony up the cash for four new tires or that new hair-braiding shop.
    "Alexa, slaughter the fatted calf."

  4. Likes scott liked this post
  5. #4
    Join Date
    Friday, November 1st, 2013
    Last Online
    Today @ 7:18 AM
    Posts
    12,061
    Post Thanks / Like
    I find the words AOC and Sanders use to describe the evil money changers applies more than perfectly to themselves.
    • “Weakness is refusing to take responsibility for your own actions, weakness is pointing your finger at someone else in a time of crisis." — Minneapolis Mayor Jacob Frey, blaming Trump.
    • "We hold these truths to be self evident. All men and women created by the, you know, you know, the thing." —Joe Biden, explaining the Creator.
    • "The way I see it, there's always, c'mon, there's always money. It's there." —Elizabeth Warren, explaining socialism.
    • “The interesting thing about the Green New Deal is it wasn’t originally a climate thing at all.... We really think of it as a how-do-you-change-the-entire-economy thing.” —Saikat Chakrabarti, then AOC's Chief of Staff.
    • "We have to stop demonizing people and realize the biggest terror threat in this country is white men, most of them radicalized to the right, and we have to start doing something about them." —CNN's Don Lemon, showing how to stop demonizing people.


  6. Likes Michele liked this post
  7. #5
    Join Date
    Saturday, January 3rd, 2015
    Last Online
    Today @ 5:55 AM
    Posts
    12,481
    Post Thanks / Like
    Quote Originally Posted by Gingersnap View Post
    But why do loan sharks exist? If everybody is frugal, manages funds responsibly, lives below their income, and never needs immediate money, why do these instruments exist?

    The answer is that people don't live that way.

    We are getting rid of payday loans out here because they prey on the poor. Well, yes and no. If you get one to pay for keeping your beater car running so you can work, it's a good deal. I mean, if you are in that position there is obviously no family member or friend you can tap for that radiator replacement. What are you going to do? Quit your job?

    If you use them to buy drugs or alcohol, obviously that's stupid.

    So, we jettison the really needy to protect the abusers?

    I've been poor. While much is self-generated, some isn't. All these 'predatory lending' things look awful to people who will never have to use them but they do serve a purpose - just like old school loan sharks.

    Yes, people use this stuff badly. Not everybody does.

    Now, we can go back to cash and carry. I could easily as could many here could but that isn't true of a lot of people. They can make minimum usury payment but they can't pony up the cash for four new tires or that new hair-braiding shop.
    OK, should the poor folks that need tires pay 100% interest? After all, otherwise they would have to quit their job.

    Mark
    Race Card: A tool of the intellectually weak and lazy when they cannot counter a logical argument or factual data.

    "Liberals have to stop insisting that the world is what they want it to be instead of the way it is." - Bill Maher

    Political correctness is ideological fascism. It’s the antithesis of freedom. Dr. Piper

    Gender is not a "Social Construct", it is an outgrowth of biological reality.

  8. Likes Celeste Chalfonte liked this post
  9. #6
    Join Date
    Saturday, January 3rd, 2015
    Last Online
    Today @ 5:55 AM
    Posts
    12,481
    Post Thanks / Like
    One more thing that bothers me about credit card companies. They charge the business for the transaction. Usually 2 to 3%.

    They are getting paid from both directions, I doubt they need to make more than 15%

    Mark
    Race Card: A tool of the intellectually weak and lazy when they cannot counter a logical argument or factual data.

    "Liberals have to stop insisting that the world is what they want it to be instead of the way it is." - Bill Maher

    Political correctness is ideological fascism. It’s the antithesis of freedom. Dr. Piper

    Gender is not a "Social Construct", it is an outgrowth of biological reality.

  10. #7
    Join Date
    Wednesday, June 17th, 2015
    Last Online
    Yesterday @ 8:57 AM
    Posts
    11,643
    Post Thanks / Like
    Quote Originally Posted by 80zephyr View Post
    One more thing that bothers me about credit card companies. They charge the business for the transaction. Usually 2 to 3%.

    They are getting paid from both directions, I doubt they need to make more than 15%

    Mark
    Not the point. The point is that an arbitrary legislated interest cap doesn't allow the market to ebb and flow as needed.

  11. Likes scott liked this post
  12. #8
    Join Date
    Saturday, January 3rd, 2015
    Last Online
    Today @ 5:55 AM
    Posts
    12,481
    Post Thanks / Like
    Quote Originally Posted by Lady Marva View Post
    Not the point. The point is that an arbitrary legislated interest cap doesn't allow the market to ebb and flow as needed.
    I agree with that...to a point. There are really only 3 major credit cards out there, and I have a feeling none will "rock the boat".

    Mark
    Race Card: A tool of the intellectually weak and lazy when they cannot counter a logical argument or factual data.

    "Liberals have to stop insisting that the world is what they want it to be instead of the way it is." - Bill Maher

    Political correctness is ideological fascism. It’s the antithesis of freedom. Dr. Piper

    Gender is not a "Social Construct", it is an outgrowth of biological reality.

  13. #9
    Join Date
    Wednesday, June 17th, 2015
    Last Online
    Yesterday @ 8:57 AM
    Posts
    11,643
    Post Thanks / Like
    Quote Originally Posted by 80zephyr View Post
    I agree with that...to a point. There are really only 3 major credit cards out there, and I have a feeling none will "rock the boat".

    Mark
    Perhaps. But don't forget it trickles down to credit company loans, bank loans, short term credit for buying inventory and business supplies.

    As with most things, whack-a-mole here and the effect is on something else.
    No thanks to dictates by gubmint employees!

  14. Likes 80zephyr liked this post
  15. #10
    Join Date
    Tuesday, October 1st, 2013
    Last Online
    Today @ 7:06 AM
    Posts
    22,365
    Post Thanks / Like
    Quote Originally Posted by 80zephyr View Post
    OK, should the poor folks that need tires pay 100% interest? After all, otherwise they would have to quit their job.

    Mark

    I doesn't really work that way or it certainly doesn't have to work that way. These loans are designed to get you through a couple of weeks between paychecks. They aren't designed to be long-term debt instruments.

    Sure, some people do misuse them. I don't know how you get around that. Somewhere out there, somebody is using a toothbrush in a dangerous or morally questionable manner.

    Most people are using little loans as intended. Yep, they do pay ridiculous interest after the first week but what's the alternative? Corporate Giant Bank isn't going to loan a 20 year old dishwasher $200 bucks for two weeks. The labor costs for processing that loan all the way down the line exceed the loan value itself let alone the interest. A bank loan, even if you can get one for that amount, will take more than one day while a payday loan takes 20 minutes tops.

    Bad interest rates are bad. How well I know. But at certain times, bad interest rates are a lot better than no loan at all. We can't and certainly shouldn't force banks to lend by law - that's a recipe for disaster so they will adjust their lending to circumstances. Capped interest will necessarily close some borrowers out of the market. Just as getting rid of payday loans will make some people use illegal lenders.

    The market never goes away regardless of what regulators or politicians do.
    "Alexa, slaughter the fatted calf."

  16. Likes scott, 80zephyr liked this post

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •