Re:Bernie Sanders interest-rate cap could end credit-card re...
by oil25 on Saturday May 11, 2019 @12:30PM
(#19886957)
Lots of speculation, mostly from owners of Web sites which profit off marketing credit cards. The article tries to claim that low-interest loans are BAD for consumers because they "generally set at a higher amount each month". Do they really expect any intelligent person to believe this shit?
Re:Bernie Sanders interest-rate cap could end credit-card re...
by konschubert on Saturday May 11, 2019 @12:59PM
(#19887146)
Credit card rewards create a very bad incentive because they push consumers to choose cards with high merchant fees, who then have to rise their prices and make everybody pay the bill.
Thus creating a race to the bottom with ever-increasing credit card fees.
Re:Bernie Sanders interest-rate cap could end credit-card re...
by sitkack on Saturday May 11, 2019 @02:30PM
(#19887610)
This needs to be stated in more ways. Credit cards themselves encourage inflation (credit card fees, offset payments, lack of savings to pay for goods). And those same rewards programs are paid for with merchant fees, further encouraging price inflation.
Re:Bernie Sanders interest-rate cap could end credit-card re...
by edbaskerville on Saturday May 11, 2019 @03:52PM
(#19888051)
Yes! We should simply make credit card rewards illegal in a more direct way. Effectively, people with low-paying rewards cards—and people paying in cash—are subsidizing people with high-paying rewards cards.
In other words, credit card rewards are yet another wealth transfer from poorer people to wealthier people.
Re:Bernie Sanders interest-rate cap could end credit-card re...
by rando444 on Sunday May 12, 2019 @10:25AM
(#19892081)
If you can't pay your bill in full, you work out a plan with your bank to pay your debt back over time.
Your credit card limit was already determined by your income, so the possibility for individuals to get themselves into financial trouble is rather low.
Re:Bernie Sanders interest-rate cap could end credit-card re...
by HarryHirsch on Saturday May 11, 2019 @12:31PM
(#19886963)
There already aren’t a lot of cards to build (or rebuild) your credit.
I never understood that. You'd think that creditworthiness means that you have a habit of paying your bills on time, and that your scheduled payments are in proportion to your income. Nothing more. But in America they insist that you have a credit card and have a history of paying that. It's a problem when you are a recent immigrant and seek to get a mortgage because you'd like to settle in a certain town. If the Sanders proposal does something about that craziness I'm all in favour.
Re:Bernie Sanders interest-rate cap could end credit-card re...
by willio58 on Saturday May 11, 2019 @02:33PM
(#19887629)
Good. Credit card rewards are great for the few people who have enough self control to not get into debt, but terrible for everyone else. They drive people into a spiral of debt.
The Fox News commentariat will swallow it wholesale, and they are more numerous.
More vocal and likely to act in a coordinated effort? Unfortunately, probably.
Thus creating a race to the bottom with ever-increasing credit card fees.
In other words, credit card rewards are yet another wealth transfer from poorer people to wealthier people.
If you need a loan, you ask the bank.
In the absence of credit card interest rates, we pay yearly fees for cards depending on the rewards offered by each.
It's kind of the best of all worlds if you ask me.
Your credit card limit was already determined by your income, so the possibility for individuals to get themselves into financial trouble is rather low.
Credit card reward programs exist to encourage spending on massively over market interest rates.
Also, capping the interest rate doesn’t reduce the benefit to making encouraging people to spend and carry debt, so I doubt they’ll go away.
That is exactly what it does. The benefit to people carrying debt is the interest they pay. If you reduce the interest rate, you reduce that benifit.
More charitably, they exist to encourage you to spend what you'd spend anyway, but on their particular card.
I don’t believe this would have been possible without high interest rates. I took a calculated risk.
It is possible that issuers would respond by replacing with secured cards but consumers hate those and introduces a lot more friction into process.
I never understood that. You'd think that creditworthiness means that you have a habit of paying your bills on time, and that your scheduled payments are in proportion to your income. Nothing more. But in America they insist that you have a credit card and have a history of paying that. It's a problem when you are a recent immigrant and seek to get a mortgage because you'd like to settle in a certain town. If the Sanders proposal does something about that craziness I'm all in favour.