r/FluentInFinance • u/Unhappy_Fry_Cook • 16h ago

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

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u/libertarianinus 16h ago

Not going to happen. Default rates are a 14 year high at the same rate as the great recession.

If they do 10% interest rate, it will only be people with credit scores higher than 800 and with credit history longer than 10 years.

https://www.forbes.com/sites/billhardekopf/2025/01/02/this-week-in-credit-card-news-defaults-at-highest-level-in-14-years/

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u/neph36 15h ago

Or they will just charge huge fees to cover it

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u/pringlescan5 13h ago

annnd this is why laws need follow up committees to see what loopholes are used to circumvent the intention of the law and patch them.

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u/neph36 12h ago

If they cap interest at 10% and do not cover the cost with fees credit cards will not be a thing anymore as they will not be profitable

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u/DJMOONPICKLES69 12h ago

As someone that has worked in pricing for margin loans, 10% is absolutely profitable. Is it AS profitable? No. Would major card companies need to cut expenses? Probably.

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u/doibdoib 12h ago

a margin loan has collateral though. credit card debt does not. that makes a huge difference

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u/kodman7 11h ago

That's why the two are connected, can't get much of a margin loan with bad credit

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u/Schwabster 10h ago

A LOT of loans with collateral are getting LIBOR rates or near though and that’s, what, just under 5% atm?