Should the government place a limit on the interest rate that a credit card company can charge consumers?

Question

Does the government have the right to reduce a private sector company's ability to mitigate consumer credit risk?

Will many Americans be deprived of access to credit as a result, with the ultimate consequence of reduced consumer spending and a weakened economy?

Or will such regulation result in the improved financial stability of the American family and thereby a strengthened economy and country?

Answer 1

In the UK the only industry we have left is retail, and it is in the Governments interest to encourage reckless lending, to keep up purchase taxation (VAT), allow inflated profits                     ( corporation tax) and maintain a feel good factor.

In return the Banks charge draconian credit card interest rates to mitigate the risks in sub prime business, make a fortune out of the exchange rate mechanism (that why we do not use the Euro) when imported consumer goods come into the country.

Effectivelly the consumers in the UK borrow money on their credit cards to prop up the Government and ensure the banks can report record profits every year.

Answer 2

That already is the case. They are called usury laws.

Answer 3

Credit is a very expensive commodity and the going rates will inevitably increase with other prices.

The interest rate charged is just a business decision by the company, just like your prices in the corner shop.

Perhaps government would be better to make it less easy to get credit cards in the first place.

It might stop some people mortgaging their future.

Answer 4

They do, the cap is somewhere around 35% annual interest rate.

Answer 5

yes, ASAP.!!

Answer 6

Yes, banks always cry about money and yet there credit interest rates are sky high.