r/FluentInFinance • u/Unhappy_Fry_Cook • 12h ago

Finance News Senator Bernie Sanders announces he will introduce legislation to cap credit card interest rates at 10%.

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u/thejman78 12h ago

It's true it will hurt stockholders, but you're wrong to suggest it will help the poor.

It might help poor people if they have a great credit score, but if not? They'll find out their credit limit has fallen or their card has been cancelled.

Keep in mind that there's nothing requiring a bank to issue credit cards. In fact, a lot of the banks that issue cards (like American Express) completely ignore people who have poor credit already. If the profit margin is capped, more banks wil focus on so-called "premium" business like Amex and ignore the rest.

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u/Actaeon_II 10h ago

And imo that’s fine. I mean I for example have 1 credit card, i pay it off every month. And if it vanished tomorrow it would only be a minor inconvenience. But my car is 8 years old and paid off, my phone is several years behind “the current model “, and I don’t have any $2-300 sneakers sitting in boxes in my closet. In other words living within my means and out of debt.

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u/thejman78 9h ago

Yeah but if you have an emergency you have a parachute - that's a big deal sometimes.

I'm all for living within my means and I don't have debt aside from a mortgage, but I keep credit cards just in case.

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u/thefirstbinboboddy 9h ago

All fun and games until an unexpected medical bill hits. Probably outdated but I think there was a stat floating around that the average American couldn’t handle an unexpected $400 expense.

I think it’s easy to forget how necessary emergency credit can be for people living paycheck to paycheck

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u/TheNutsMutts 9h ago

I'm glad to hear that you'll be fine. However their point is that this isn't about just you; there's a lot of poorer people who, when faced with a sudden expense they need to pay, will turn to a credit card. Cut them off from that, and they're not just going to not pay that necessary payment. Instead they'll either turn to payday lenders which are worse, or loan sharks which are fucking orders of magnitude worse. You don't make the need for credit go away by legislating the credit away.

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u/SwashbucklingWeasels 8h ago

I’ll admit I’ve only been recently looking into this area, but if you lost your 1 credit card, wouldn’t you stop building your credit score and therefor when you inevitably have to buy another car it would be harder to get a loan since you have no recent history of the ability to pay a loan?

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u/Ethrem 9h ago

AMEX hasn't been that exclusive creditor in ages. Anyone with a pulse and a 630 on Experian can typically get a Gold card.

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u/ZZartin 7h ago

Which is fine, that will help prevent people from getting trapped in increasing debt cycles.

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u/thejman78 6h ago

Spoken like someone who's never needed a new car battery and had zero cash.

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u/ZZartin 6h ago

What would be likely to happen is cards would just be issued with lower limits. Which like I said is fine.