Democratic Senator Bernie Sanders presented the account for the interest rates of credit cards at 10 percent – promising President Donald Trump campaign 2024. years.
Bipartisan legislation, coated with the Senator Josh Hawley, Missouri Republican, is presented on Tuesday in the Senate.
“This legislation is harmonized with the promise of Trump Trump to impose” the interim cap for credit card interest rates, “Anna Bahr, director of communication for grinders, Newsweek.
Newsweek reached for Senator Hawley’s offices for comment by email on Monday.
Why is it important
This biparted move deals with growing financial stress of American consumers, which are all burdened by a credit card debtor in the midst of growing costs of life.
Credit card debt in the US hit 1.17 trillion dollars in the third quarter of 2024 – an increase of $ 24 billion from the previous quarter, according to New York Fed Data. What more, the default credit card values are significantly higher. High credit card interests further complex these challenges, making it even harder to consumers to repay their debts.
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What to know
In the middle of a high inflation and climbing interest rate, Sanders-Hawley Bill promises a significant relief.
The average interest rate of credit card hovered over 20 percent in the past two years, according to the data from St. Louis FedWith many Americans are growing with even greater rates.
Meanwhile, credit card companies reap the benefits. Toward Consumer Protection Bureau (CFPB)Credit card companies accused Americans $ 105 billion for interest rates for 2022. year.
If the proposed, the account would reduce these rates for more than half, potentially saving consumers in interest payments and alleviating economic pressure on millions of workers families.
During the rally in Long Island, New York, last September, Trump was talking about closing interest rate credit cards at about 10 percent, claiming that we could not let credit card companies “make 25 and 30 percent.
“As working Americans agreed, we will set a temporary cap on the interest rates of credit cards,” Trump said.
Sanders often opposes trumps on various issues. But by crossing the legislation of the Trump campaign, the promise in the law, the Senator also emphasized the urgency of this issue and the potential for the cooperation between Bipartizana.
Potential shortcomings of Kabanja Interest to close credit cards
The proposal met the resistance of financial institutions. And some experts warn that scheduling interest rates would thus drastically restrict credit access to consumers with higher credit risks, pushing them according to alternative financing capabilities such as predatory payments.
“If you are forced to the cap (APRS for) those with the highest interest rates, it would no longer make any issuers offered their product because it could not be nor positive from the proxy prospect,” John Cabell, “Management Director for Intelligence Services in JD, he said Wealth.
TED ROSSMAN, older analyst industry in Bankrattold Newsweek Credit card company can compensate for income loss by increasing other fees or reductions. But the biggest unintentional consequence noted, it would be a reduction in the availability of the loan.
“10% cap would not be almost profitable for lenders, so they wouldn’t make so much borrowing. And until I want to pay 20 or 30% interest rates, it is important to note that the loan approach is vital for many households,” said is Rossman.
What do people say
Anna Bahr, Director of Communication for Senator Bernie Sanders, said Newsweek: “It is no secret that large financial institutions and conglomerates credit cards will spend huge amounts in contributions for the campaign and lobbying of this legislation. They will do everything that can continue to do billions of interest interesting credit cards.. The good news is yes, According to a recent survey, 77% of credit card owners want to can have credit card interest rates.
The question is that the Congress will listen to large directors of banks who want to protect the status quo or will congress listen to the huge most of the American people? “
Senator Bernie Sanders, Vermont Democrat, said in a recent statement: “When major financial institutions accuse over 25 percent of credit card interest, they do not deal with the loan available. We cannot continue to allow large banks to rename the huge earnings of people. This legislation will provide work families that struggles to pay bills with desperate necessary financial relief. “
Senator Josh Hawley, Missouri Republican, said in a recent statement: “Working Americans are drowning in a record debt long credit card, while the largest credit card publishers become richer and richer by mountaining their interest rates on the moon. It is not only wrong, it is exploitative. And that needs to be completed.”
“Scheduling interest interesting interest cards at 10%, just as the President of the Trump campaign, an easy way to allow meaningful relief to the work people. Let’s do.”
TED ROSSMAN, older analyst industry in Bankrattold Newsweek: “Credit cards provide valuable service and 10% rate threatening. I would like to see that everyone pays as quickly as possible, but 10% rate rate feels like an attempt to solve a US loan problem with a long card throwing baby with a by bathing water. “
Lindsey Johnson, President and Executive Director of the Association of Consumer Bankers (CBA), said in a recent statement: “Research clearly show that when politicians, not on the free market, ultimately pay the price through limited choices outside the well-regulated banking system, but it uses the loans for payments, almost double the national average. Those consumers pay annual interest rates of more than 300 percent due to lack of access to the bank loan. “
Karoline Leavitt, Current Secretary for White House, she said CNN Last September The idea would “… provide temporary and current relief for hard-to-marivable Americans to meet ends and cannot afford to pay for splashing mortgage, renting, groceries and gas.”
What happens next
Success in an account that hinges on congress support and potentially Trump approval. As discussions and discussions take place, the implications of this legislative effort will become clearer.
2025-02-10 21:44:00
