Is our government doing anything to reduce credit card rates? I have a card at 29% and in my opinion is a form of legal loan sharking. I also have a payday loan at around 60%. How is all this legal??
You are absolutely right, 29% interest is certainly immoral and should be illegal, but it's not...at least in a few states (such as South Dakota) where they have no usury laws. Unfortunately, the Federal government has adopted the stance that interest rates should be governed at the state level and they have allowed lenders to import the interest rate of the state in which they are based. So no matter where you live, you are subject to the rates allowed by the state where your credit card company is based. Just look at the return address on your credit card statement and you will see they all come from states like south Dakota, Delaware, etc.
In response to your question about the government doing anything to reduce credit card rates.....the answer is NOPE! The Office of Thrift Supervision did adopt some rules to regulate interest rate hikes back in Dec. '08 but those rules won't even go into effect until July 2010. In the meantime, the rules have actually encouraged credit card companies to hike rates dramatically so they won't have to worry about any impact from the new rules.
My advice is recognize your credit cards for what they are...legalized usury. Pay them off asap and then avoid them like you would the loan shark who lends money from some darkened alley.
Instead of waiting for the government to protect us from predatory lenders I think we should all save more and spend less, and encourage and educate others to do the same. If everyone did that then predatory lenders would be out of business because no one would need their "service." I know that I don't want my kids to grow up and be exposed to them.
I completely agree. We all worry so much about everyone else and the state of the economy, how about my economy? From here on out it's all about numero uno.
I completely agree. We all worry so much about everyone else and the state of the economy, how about my economy? From here on out it's all about numero uno.
You are on the right track when you realize that we shouldn't worry about what the national economy is doing and should focus on our own individual economy, but be careful to avoid an attitude of isolationism. Looking out for "numero uno" is important, but a truly prosperous life is also a balanced life. When you only focus on yourself it's easy to let greed and other destructive attitudes gain a foothold. That's one of the main causes of our economic meltdown.
A better attitude is to focus on building symbiotic relationships, that way everyone involved in the relationship benefits, not just yourself. By being concerned about the well being of others (as well as yourself) you will find more balance, meaning, and purpose in your life. Remember, your personal economy is important so that you can thrive and be of assistance to others. Just don't let yourself be manipulated by lenders, merchants, economists, or anyone else, into sacrificing your financial health simply to benefit someone else.
