Senator Bernie Sanders (I-VT) and Representative Alexandria Ocasio-Cortez (D-NY) have introduced legislation that would cap credit card interest rates at 15 percent and allow states to lower limits as they see fit.
They claim that they are helping the poor and vulnerable. But that is nonsense.
A lot of credit cards that have high interest rates do so to protect themselves from high-risk or low-income borrowers, while still extending credit to these individuals. Once they have improved their credit rating and shown they are responsible borrowers, they can negotiate better terms and conditions – if that firm doesn’t give it to them, then they seek elsewhere for better rates.
So, if there is a limit, then high-risk borrowers will be shunned out of the marketplace.
In a world where credit is essential to living, All Outta Cells and Soviet Sanders will not let these people function.
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