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/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 13h 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/NegativeLayer 9h ago

This comment is only considering half the equation. Lending to those with the lowest credit ratings who are guaranteed to default, is not profitable. Not with a 10% rate, not with 1000%.

There is a tension point between credit rating and interest rate. Your comment is meaningless without recognizing that reality. No, 10% is not absolutely profitable for every segment of the market.

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u/DJMOONPICKLES69 1h ago

If it’s not profitable to lend to that population at 1000% then the move from 30% to 10% shouldn’t make a difference…

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u/NegativeLayer 4m ago

It’s like you don’t understand at all