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February 12, 2005

Credit Card Interest Rates

There is a credit card company in Britain that charges a 70% interest rate.

Many credit cards here in the USA charge 20 to 25% rates - outrageously high.
And poor people are the ones likely to be hit by these charges.
Other credit cards flat out lie about 'fixed rates'.

There used to be usury laws back in the day. They limited credit card and other interest rates to maybe 14 to 18%. I guess some court or other threw out usury laws, or perhaps lawmakers were convinced by bankers to get rid of those laws must have been during President Carter's time in office - when interest rates on homes were up to 15, 16% and more and no one could afford to buy one. Or perhaps it was Paul Volker. Here is a history of prime rates.

When the prime goes up, credit card interest rates go up - but I have never seen them go down - perhaps it is time to reconsider usury laws - stop the 'check cashing' businesses who prey upon the poor and put a top limit on credit card rates.

Posted by Beth at February 12, 2005 10:22 AM