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Sanders' bill would cap interest rates on credit card debt
By Peggy Stillwell on Apr 18th, 2010
A senator from Vermont recently announced he will present a bill that would put a national cap on interest rates.
Bernie Sanders said he would present the bill while the Senate debates federal financial reform measures. Sanders spoke during a rally held in Washington, D.C., by the Metro Industrial Areas Foundation.
Sanders said card companies have reached a point where they are engaging in practices similar to extortion and loan sharking.
"Let's be clear. When credit card companies charge over 20 percent interest on credit cards they are not engaged in the business of making credit available to their customers," said Sanders, who wants a 15 percent ceiling on interest rates.
The Vermont senator's bill is in response to actions from credit card issuers, many of whom raised interest rates on many accounts in anticipation of new laws from the government. The Credit Card Accountability, Responsibility and Disclosure Act puts limits on whether card companies can increase rates.
Although Sanders' bill could help many consumers dig out of debt, similar legislation has failed in the past. One alternative consumers may consider while waiting for reforms is debt consolidation, which can lower interest rates and the amount consumers pay over time. It can also make bills easier to pay by collecting them into one monthly statement.
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