4 ms·

Trump announces one-year 10% cap on credit card interest rates

16 points by geox 10mo ago

whattheheckheck 10mo ago
Seriously read Basic Economics Not enough % return on risk and the company cancels their service and consumers have to go to loan sharks or get even more desperate and ready to do whatever they need to to survive
- Nextgrid 10mo ago
  Going to a loan shark is a significant increase in effort comparing to just using the credit card you've already got. Sure, some people will, but a lot of people will just cut back discretionary spending as a result, which I think is a very good thing.
- acuozzo 10mo ago
  > or get even more desperate That's because, to him, "Make America Great Again" == "Make America resemble 1880 as closely as possible". Peak Gilded Age. Gold-plated lavatories with countless hungry, desperate, and poor to keep them tidy, build bridges, make babies, toil, and die.
Trumpi 10mo ago
In Trump's original post, he is "calling for" the rate cap, which I interpret differently to "mandating" a rate cap. The Guardian article seems to think that the executive has no authority to compel banks to comply, and this might well be the reason he is merely "calling for" this rate cap. And if this is the correct interpretation, then this was communicated in a very confusing way.
bediger4000 10mo ago
Wow, this is great! It's frankly wonderful we have a president we trust with these decisions. Can you imagine the congressional hearings that a move like this from any of the other presidents we've had since 1988? Media would have freaked out, markets tumbled. There would have been impeachment rumors. But now? We get "just the facts" reporting, and it just happens. No hearings, no media frenzy, market soars.
jfengel 10mo ago
Setting aside the legality of this, is it even possible for credit card companies to work with rates capped like that? I'm sure the credit card companies are plenty profitable right now and could probably afford some kind of cut. Just the transaction fees alone seem disproportionate to the costs. But they do have to cover things like defaults, the opportunity cost of the money, fraud (they have to eat the costs of identity theft under the Truth in Lending Act), etc. Clearly they're turning a profit at 20%; can they still at 10%? At the very least, I suspect some people will find that their credit cards are canceled.

16 points by geox 10mo ago

Seriously read Basic Economics Not enough % return on risk and the company cancels their service and consumers have to go to loan sharks or get even more desperate and ready to do whatever they need to to survive

Nextgrid 10mo ago
Going to a loan shark is a significant increase in effort comparing to just using the credit card you've already got. Sure, some people will, but a lot of people will just cut back discretionary spending as a result, which I think is a very good thing.
acuozzo 10mo ago
> or get even more desperate That's because, to him, "Make America Great Again" == "Make America resemble 1880 as closely as possible". Peak Gilded Age. Gold-plated lavatories with countless hungry, desperate, and poor to keep them tidy, build bridges, make babies, toil, and die.

Trumpi 10mo ago

In Trump's original post, he is "calling for" the rate cap, which I interpret differently to "mandating" a rate cap. The Guardian article seems to think that the executive has no authority to compel banks to comply, and this might well be the reason he is merely "calling for" this rate cap. And if this is the correct interpretation, then this was communicated in a very confusing way.

bediger4000 10mo ago

Wow, this is great! It's frankly wonderful we have a president we trust with these decisions. Can you imagine the congressional hearings that a move like this from any of the other presidents we've had since 1988? Media would have freaked out, markets tumbled. There would have been impeachment rumors. But now? We get "just the facts" reporting, and it just happens. No hearings, no media frenzy, market soars.

jfengel 10mo ago

Setting aside the legality of this, is it even possible for credit card companies to work with rates capped like that? I'm sure the credit card companies are plenty profitable right now and could probably afford some kind of cut. Just the transaction fees alone seem disproportionate to the costs. But they do have to cover things like defaults, the opportunity cost of the money, fraud (they have to eat the costs of identity theft under the Truth in Lending Act), etc. Clearly they're turning a profit at 20%; can they still at 10%? At the very least, I suspect some people will find that their credit cards are canceled.