Quote:
Originally Posted by Parallex
Regardless, I think the Credit Card interest cap business is something that sounds good but I'm not sure it wouldn't do more harm then good unless Layton has further plans to establish Credit caps/service charge caps to prevent lenders from shifting the burden on to other services in order to maintain profit margins. I suppose lower Credit Card interest rates may make that unnessicary (alternative hikes from the credit lenders) if it encourages greater use (higher average balances) but then we've started further encouraging personal debt... and higher personal debt loads hardly sounds like a good thing.
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If the NDP were to have to put caps and limits on all means financial institutions have to generate a profit it would be all out super regulation of the financial industry and will drive up the costs of capital for all and hurt us economically. All for the sake of limiting the punishment for activities that constitute the pinnicle of financial stupidity (running credit card debt). This is an example of a typical NDP policy plank of serious economic unintended consequences to appear to 'defend the poor.'
This would also directly hurt those it intends to help too. If you're the credit card company and you cannot get more than 5% over prime for unsecured credit than the natural reaction would be to cut the limit capacity for people that have balances and thus reduce people's access to credit. In effect this would actually take away peoples lifelines in the case they have no other options to pay for things. Dumb dumb dumb.