876
Credit card late fees capped at $8 under Biden crackdown on 'junk fees'
(www.usatoday.com)
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 05 Mar 2024
876 points (98.6% liked)
News
23275 readers
1347 users here now
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
founded 1 year ago
MODERATORS
Interest caps mean that poor people just won’t get any credit at all.
Yeah, because lenders are going to turn down 10% if they can't get 29%...
10% guaranteed is more than enough to motivate lenders.
If you are credit worthy and lenders can give you 10% they will, because there is another lender out there that will give you 10% if you are good for it. If you are getting a 29% interest rate it’s because you are a default risk, it’s unsecured, a short term loan, or any combination of the 3.
Rates just don’t come out of thin air. It’s based off of risk. If you cap rates at 10% then the only people who will get credit at 10% are going to be wealthy people.
That's credit card interest...
And we're talking about credit cards...
At least I am, and everyone else. Because this is the comment section of an article about credit cards.
If you're talking about something else, maybe you should let people know? Or at least be understanding when others can't read your mind.
I’m talking about all types of credit, including a line of credit like a credit card. It’s unsecured so the rate is way higher. If you capped the rate on credit cards then people who are higher credit risk won’t be given credit.
People who are credit worthy get spammed with all sorts of credit card offers for low APR cards. With an high 700-800 credit score you could score a line of credit at 10% APR but you’d have to go to a bank or credit union to get it.
It's never truly guaranteed, even if there's collateral.
Guaranteed as in rate of return for the lender....
Like, yeah, there's some breakage, but your return on investment is going to be close to interest rate.
Buy a stock and you might beat 10%, you might not.
Buy debt, and you get your interest or sell it to a third party for a smaller amount, likely still more than the amount loaned, just piled high with interest.
It's not guaranteed because a lot of people default of their loans.
And collateral can lose value after the loan is issued.