Quote:
Originally Posted by Cowboy89
Actually it's pretty clear what would happen as a result of this policy.
1) If I were a credit card company I would immediately drop the credit limit of anyone with a balance and medium to low credit to exactly that balance and lower it with every reduction of principal that person makes. Futhermore I wouldn't issue new cards to new accounts without pristine credit history, because credit card debt is unsecured. This isn't really being predatory, it's really protecting your own behind because the only thing that allows the credit card company to give money away that people take decades to pay back without collateral is insanly high interest payments.So basically this removes a credit card from a lot of people's wallets.
2) To make up for losses, the credit card companies are going to grind businesses on transaction fees, which will in turn raise prices for the consumer.
3) The end result will be higher prices on goods that are purchased with credit cards and lower credit capacity among purchasers. This obviously leads to less transactions occuring, lower business profits, worse economy in the short to medium term.
4) The only shining light with this policy is that it might for the long run remove a blunt object that so many people use to hit themselves in the head with. Credit card debt keeps poor people poor. This would take away the ability of so many people from self harming themselves.
|
I think you're definately right in assuming credit cards will not be as common. Any bill legislating maximum interest rates is surely going to have some laws around other fees to circumvent workarounds though.