User Comments

1. 

   2/20/09

   clioandme

   I would certainly favor something less usurious. I also wonder at the banks' ability to up rates if a customer was late on someone else's bill, or if he or she was late because the bank sent out the bill late . . . There have been lots of shenanigans.
   
   Of course, this could take care of itself if consumers wise up and quit buying things with credit cards, since no amount of extra interest and fees is going to make up for the revenue lost when people quit making purchases with plastic. But I won't hold my breath on that.

   [reply]
   1. 

      2/20/09

      satijournal

      I pay for everything with my credit card so I know where every penny goes, and I usually pay off the balance at the end of the month.
      
      Some people do abuse credit. The problems occur when somebody builds up a large balance and then loses his or her job, is late one time and then the interest goes way up and before long the balance doubles and there's no way of getting out of debt.
   2. 

      2/20/09

      NewBlogger2008

      mark- It is not that people should stop buying products with their credit cards. That is not the issue. The issue as Sati says, comes when people abuse their credit and spend more than they can pay back. That is what this whole recession is about. It is fine to use credit cards, but people have to learn to be responsible with them. I do not think that nationalizing any kind of interest rates is going to work because that is just going to scare people even more and make things worse.
   3. 

      2/20/09

      clioandme

      Scare who how? Certainly not consumers, since presumably this would be a cap, not a minimum. And the credit card companies? Would they really stop loaning if they couldn't pull more than 21% on their riskier loans given how cheap money is for them? If so, wouldn't they just stop giving credit to the biggest risks? Would that be such a bad thing?
   4. 

      2/20/09

      MadameX

      It might be a bad thing, Mark, because for the credit card companies, it's people like Sati who are the "biggest risks" these days. According to Elizabeth Warren, the term "deadbeat" in the credit industry now refers to someone with a nasty habit of paying of his/her bill before interest charges are accrued. Someone who misses payments, carries a high balance, but keeps scrambling to catch up while incurring late charges and over the limit fees is a much more profitable customer than someone who uses credit responsibly.