One of the seminal problems with the United States and its laws is the exceptions to those very same laws, of which, on the books, there are Usury laws that limit how high a given interest rate can legally be, but for whatever reason(s), this does not apply on the Federal level and we find that on a State level, they are often exempt from the Usury law, as well. This signifies that in consideration that as of the second quarter of 2024, national credit card debt was at a record $1.142 trillion, and that those with credit card debt, are often paying rates of 24% per annum, or even more, this seems quite unfair – whereas such a high interest rate is obviously quite good for those that issue that debt, and terrible for those that have incurred that debt.
Look, it has to be said, those that who issue credit to consumers are entitled to a reasonable profit, but should not be entitled to make an outrageous profit, especially when the typical person who has credit card debt is the very same who doesn’t have a lot of excess money, to begin with. In other words, those who are in credit card debt, are usually people who are struggling to stay whole and thereby keep their heads above water; therefore, it doesn’t do any good for them, to pay unreasonable credit card interest rates when they really can’t afford to.
In the lending business, there is plenty of profit that can be made, without charging an excess interest rate. In fact, in regards to other important loans, such as mortgage rates we find that they are almost always considerably lower than credit card interest rates, as well as that also being the case with many vehicle loans. No doubt, there is a difference, between these types of loans, because mortgages come with homes, and vehicle loans come with cars; nevertheless, the difference in interest rate is staggering and needs to be reduced in fairness to consumers.
The crux of the problem with the banking industry is that those consumers who have money, don’t really care, how high interest rates are on credit cards, because they pay off their credit card debt in full, each month, and not only that, they typically receive perks from the usage of their credit card. Rather, the issue is that those that are most dependent on credit card usage, have little voice on this important issue and are typically not championed all that well by their political representatives. That is to say, those that have the most debt, are exploited and exploited mainly because they are easy targets and have no lobbyists or important personages on their side.
The least that this governance owes its own people is to reduce the exploitation of those that are its most vulnerable, and the best way to take care of this concerning credit cards is to place a cap on how high the interest rate can go, which should be capped at the Federal Reserve target range, plus 12%, which is high enough that there is still plenty of profit for the banking institution, yet, low enough, that consumers will save some valuable dollars.