Credit Card Rate Cap Proposals Persist Despite Economist Warnings About Credit Access Risks
Two months after Trump proposed capping credit card interest rates at 10%, some politicians still push the idea despite industry warnings of economic harm. Fund&Grow CEO Ari Page argues lawmakers know such caps won't help but promote them anyway to appear heroic, exploiting widespread financial illiteracy among voters for political gain.
Originally Written by: Andrew Allen
Nothing has happened more than two months since President Donald Trump called for placing a 10% cap on credit card interest rates for one year.
Yet certain politicians keep calling for the cap to move forward. Whether these lawmakers don’t believe arguments that the cap will have dangerous effects on many people in the U.S. — or they simply haven’t paid attention to the finer points of those claims — is unclear.
Many people close to the credit card industry spoke out in the aftermath of the president’s call for a cap to explain why it may not be an effective way to improve the financial situations of many U.S. consumers.
Experts Weigh In On Cap Issues
We caught up with a few experts in the credit space to uncover explanations for why politicians continue to push a cap on credit cards despite multiple reports that point to the problems a cap would bring to the economy.
Ari Page, CEO at Fund&Grow, told us that the reason that politicians are calling for a 10% cap — regardless of whether they truly believe it will be the solution they claim it will be — is so they can sound heroic to working class people.
“I think the politicians know these policies won’t work, but they’re being disingenuous to get votes,” Page said. “Unfortunately, most people just don’t know that [a cap is] not going to help them in any way. Financial literacy in America is abysmal, and that plays a huge role in why politicians push these policies and why voters seem to love them.”
For credit card issuers, having to defend their business practices from politicians who don’t fully grasp how the card industry functions is something they may just have to deal with from time to time.
See Original Article: Credit Card Rate Cap Proposals Persist Despite Economist Warnings About Credit Access Risks
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