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Debt consolidation an option for lowering interest rates, though congressman is making his own efforts
11/26/2009
Rising interest rates on credit card debt are being brought down upon many Americans as card companies try to make up for their losses.
As a result, many people may end up finding themselves too far in debt to be able to handle their finances, which could make them prime candidates for debt consolidation. Through debt consolidation, consumers who are in trouble may be able to find some relief in the amount they pay each month in interest.
Interest payments are also the subject of legislation proposed by John Tierney, a Democratic representative from Massachusetts. Tierney's plan would limit interest rates on credit cards to 16 percent.
"While the Democratic-led Congress has taken some important action to address this issue, unfortunately, credit card interest rates are still skyrocketing at an unacceptable pace," Tierney said.
In addition to putting a limit on interest rates, the legislation would also cap fees associated with late payments at $15. That limit would also apply to other "contingency" fees. Furthermore, provisions in the bill would make sure the new federal rules would not overwrite state-based laws that carry more stringent caps on credit card interest rates.
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