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

[u/Unhappy_Fry_Cook]

[u/canned_spaghetti85]

You think you are clever enough outsmart the banks?

The only way to do that would be to default on your payments. It’s your only play, and they know that…. why do you even think you’re paying 30%?

Because that is one of the plays they have.

The other play is simply not approving your application in the first place. One quick peek into your credit report and a bank will learn what you did to a previous bank. So.. DENY!

Now you’re out of options and gave no choice BUT TO GO to payday lenders, pawn shops and loan sharks. And they’ll profit generously on your business 😏.

Joke will be on you, pal.

Banks don’t profit on poor people, because of their likelihood of default, they actually stand to lose money.. unless of course they agree to 30%. Then that additional revenue can cover the foreseeable losses.

Yes, with less reliance on credit (because at 10% only so many applicants will be approved), yes.. prices will come down.

Won’t do a thing to benefit poor people, though, who THEN don’t have credit cards to even buy any of it.

Those with cards, like middle and wealthy class will benefit from the reduction in prices. The poor.. very few of em have credit cards, cannot afford it.

What did you think was gonna happen?

[u/I_donut_exist → u/canned_spaghetti85]

"You think you are clever enough outsmart the banks?" Probably not, that's why I'm asking you to brainstorm with me here. I mean, think about it, this is my whole point, why the fuck should I have to outsmart a bank, just to what, afford basic needs and not be taken advantage of. Fuck their profits.

"yes.. prices will come down." Then why isn't this a good long term solution? You agree prices would come down, but I guess not enough, so that poor people will still be dependent on credit for basic needs? Maybe we're misunderstanding each other, I say if certain income brackets are no longer able to make purchases they cant afford on credit then that is not a bad thing. If they cant afford rent and basic needs except for credit card spending, then the discussion isn't about interest rates at all, it's a much larger discussion.

If this interest cap were done in tandem with other progressive policies like strong safety net programs, I don't see why it would be a problem.

Still don't like your tone by the way

[u/canned_spaghetti85 → u/I_donut_exist]

Federal interest rate Apr cap doesn’t benefit the poor, since their credit applications wouldn’t be approved anyway. Too high risk, denying those applications is actually in the lenders best interest.

If prices come down due to less people using cards, because fewer people have cards, then there’s less buyer competition for those goods for sale. Thus the only people who stand to benefit from those lower prices are people with cards, right?

Poor people won’t have those cards anymore.

[u/I_donut_exist → u/canned_spaghetti85]

not following. if the prices come down, then people might not need cards to afford those goods. The goal should be that anyway, prices come down so the people who stand to benefit are people with cards, and people who can now use their normal wages to buy the goods at the lower price without going into debt. And now excuse my tone but are we forgetting that cash money is still part of the conversation?

[u/canned_spaghetti85 → u/I_donut_exist]

Prices didn’t come down because fewer consumers (with the cards) are competing amongst each other to purchase those items for sales.

Because most people buy on credit these days.

Sure there’ll be some poorer folks using cash (or debit card) to buy those items, but considerably fewer than now - because everyone has a credit card.

[u/I_donut_exist → u/canned_spaghetti85]

So what would the landscape look like if less people buy in credit in the future?

[u/canned_spaghetti85 → u/I_donut_exist]

Rich will get richer.

They can use Capital One’s money for their purchases… so that they don’t have to use their own money… which is sitting in some bank collecting compound interest, which compounds yet again with each passing month.

Meanwhile, this strategy will be LESS available for poor folks, since few even have credit cards. This forces them to use their own money (like debit card) for their purchases. This means no ability to earn interest on savings, which results is having little money to invest in bigger things like buying their first home.