Credit card rate caps

I left a comment for Curtis Arnold in his article titled, “Why Capping Credit Card Rates at 16% is Bad for Consumers“.

I’ll make my point first. Everyone in the financial industry should acknowledge the reality that no one knows the 100% best way. We can agree that the market will give us a better indication of what can and can not be done, rather than some politician.

He makes this hypocritical comment:

“Why not focus on payday lending, pawn loans, title loans or tax rebate anticipation loans? Some payday loans charge annual rates as high as 400%. That’s right, four hundred percent! Makes a 30% credit card look like a saint, huh?”

Here’s the comment I left:

“Curtis, you contradict yourself. You do not want rate caps on credit cards, but you do want the government to go after payday and pawn lenders.

Lending money is lending money. They have the same basic principles. The good customers pay for the bad customers.

I agree w/ the point you make about capping fees, but if you think credit cards are the lesser of two evils; compare the amount of credit card debt to other types of unsecured lending. Credit Cards probably are the biggest contributing factor in bankruptcies.

Besides, many people who do not qualify for credit cards, use payday loans. If you’re for more credit available to more people, then you should not take a shot at these loan products.”

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