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re: Capping credit card rates is going to have unintended consequences
Posted on 1/13/26 at 1:35 pm to TBoy
Posted on 1/13/26 at 1:35 pm to TBoy
Banks are better than the government at deciding who should have credit. When interest rates are high the banks let deadbeats sign up because banks know the people that pay will carry the deadbeats. When interest rates are capped, banks don't make enough to carry deadbeats so the deadbeats won't be approved for credit.
People without access to easy credit have to work more. Also they buy less chinese junk. Win-win!
People without access to easy credit have to work more. Also they buy less chinese junk. Win-win!
0
Posted on 1/13/26 at 1:35 pm to DyeHardDylan
quote:
Capping them at 10% means less people will be approved for credit cards
I think this will happen
quote:Not as sure about this. I'm rarely carrying a credit card balance no matter what. So it doesn't really affect me whether the credit card interest is 10% or 25% if I'm paying off the full balance every month. I just use credit cards for convenience and points.
Those who borrow will be less incentivized to pay their bills and more people will go into debt.
But if interest rates are capped at 10%, then I'd expect to see credit card issuers cutting back on cash back, rewards points, and other card perks. And possibly increased annual fees. The bank will make their money one way or another.
Posted on 1/13/26 at 1:35 pm to BBONDS25
quote:People respond to incentives.
quote:
If the interest rate is only 10%, why not max out the card?
Thoughts of an economic illiterate.
Posted on 1/13/26 at 1:36 pm to DyeHardDylan
quote:
Capping credit card rates is going to have unintended consequences
Absolutely.
It’s no different than any other centralized control mechanism.
Posted on 1/13/26 at 1:37 pm to TBoy
quote:
Do you think the average American would only approach credit card debt in a sophisticated manner if Trump capped the rate at 10%?
Nope. I also think thinking 10% would qualify as “only” to you is very sad.
Posted on 1/13/26 at 1:39 pm to DyeHardDylan
quote:
Capping them at 10% means less people will be approved for credit cards, as the companies will want to reduce the amount of risk they take on. Those who borrow will be less incentivized to pay their bills and more people will go into debt.
One or the other will be correct, not both. Your first suggestion is the correct one. And those people will turn to payday loans, etc. Very stupid move by Trump…if he does it.
Posted on 1/13/26 at 1:40 pm to Sasquatch Smash
quote:
Couldn’t this also make it easier, both monetarily and psychologically, to decide that they can pay off their debt?
There are many people in here who believe EVERYONE plans to pay off their debt and in a timely manner.
There are people who go into debt knowing they will never pay it off and never plan to.
Yes the total Interest accrued will decrease but the actual Debt may not.
This post was edited on 1/13/26 at 1:58 pm
Posted on 1/13/26 at 1:50 pm to Dantheman504
First to get this done Trump will need congress to got their lips off his nuts and pass a law. Second if credit is capped, get ready for all kinds of fees and restrictions, plus all of use who use credit cards to get airline miles and cash back can say goodbye to those days, or they will be severely limited.
Posted on 1/13/26 at 1:52 pm to DyeHardDylan
(no message)
This post was edited on 1/13/26 at 1:53 pm
Posted on 1/13/26 at 2:07 pm to The1TrueTiger
The only solution is to require a 10% card option while still having access available to better options. Private healthcare meets CC's. This way you can have a standard where your "credit score" isn't a dead end but will limit you to the better options with higher limits and less fees.
Posted on 1/13/26 at 2:09 pm to DyeHardDylan
quote:
Capping them at 10% means less people will be approved for credit cards, as the companies will want to reduce the amount of risk they take on. Those who borrow will be less incentivized to pay their bills and more people will go into debt.
Man shut up! They could charge 2% and make money!
Posted on 1/13/26 at 2:13 pm to DyeHardDylan
quote:
Capping them at 10% means less people will be approved for credit cards
No, that's a very intentional and needed consequence.
quote:
Those who borrow will be less incentivized to pay their bills and more people will go into debt.
I don't follow.
Posted on 1/13/26 at 2:13 pm to Henry Jones Jr
quote:Because we have the best central planners in our government to determine what's good for the economy don't we?
Capping them at 10% means less people will be approved for credit cards
Thats a good thing
Posted on 1/13/26 at 2:17 pm to Dantheman504
quote:BOHICA. Just like student loans, the government capped the rates far below the risk, and eventually took it over because no one wanted to make the loans.
The only solution is to require a 10% card option while still having access available to better options.
Given Trump's desires to have state run manufacturing, state-run pharmacies, etc... this policy seems right in line with the goal of having state-run credit cards.
Posted on 1/13/26 at 2:19 pm to Bigdawgb
quote:
TBH I don't think many folks with good credit pay interest at all. They just load it up then pay off the balance before it starts costing an extra 25%.
This is me. I have all of my bills (electric, water, internet, cell phone, insurance, etc.) all auto-billed to my card, then pay it off with a few mouse clicks before it ever accrues interest. Plus, I get cash back.
Posted on 1/13/26 at 2:21 pm to DyeHardDylan
quote:
Those who borrow will be less incentivized to pay their bills and more people will go into debt.
Make this make sense
Posted on 1/13/26 at 2:26 pm to Taxing Authority
Anything that fricks with credit scores or limits its impact is good with me. I think this is a step towards dealing with the scam that is the "credit score".
Posted on 1/13/26 at 2:26 pm to DyeHardDylan
is this actually a thing?
Posted on 1/13/26 at 2:42 pm to The1TrueTiger
quote:
Second if credit is capped, get ready for all kinds of fees and restrictions, plus all of use who use credit cards to get airline miles and cash back can say goodbye to those days, or they will be severely limited.
Do you know the merchant pays airline miles and cash back through fees for the privilege of accepting credit cards for the bank.
I owned a small business before and after the credit card boom. My commercial account checking fees cost a little over $100.00 per month. I began accepting credit cards only because my customers started saying they needed me to. My commercial account banking fees dropped but for the privilege of accepting credit cards my credit card processor charged me a little under $2,000.00 per month. I quickly raised prices to account for that.
From those numbers you can see banks make a killing off of credit cards and a huge percentage of the gdp now goes through credit cards/banks.
Posted on 1/13/26 at 3:00 pm to DyeHardDylan
quote:
means less people will be approved for credit cards
There ya go, look at the bright side!
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