Walking down Trade Street in downtown Charlotte, North Carolina, Melinda Graham spied the Bank of America football stadium a few blocks away. “That’s all my money, right there,” said Graham, one of hundreds who marched on B of A and Wachovia one day last October to demand a 10 percent cap on credit-card interest rates.
A few minutes later, Graham noticed a pair of brown leather stilettos on a sharply dressed young woman. “Look at her shoes,” she urged her 21-year-old daughter. Then she looked at me, who had just asked her about her credit-card debt: “I’m a shoe fanatic,” she admitted.
Graham can no longer afford such luxuries. She started cutting her spending after her debt topped $8,000, which is about average for the nearly half of all Americans who carry a credit -card balance. She used to go to the cinema once a week or rent half a dozen movies to watch over the weekend, but not these days. “I can’t do the things I like doing, like getting away on the weekend,” she said. “I buy only the necessities.”
In my state, credit card interest is capped at 10%…but federal law allowing out of state lenders to commit usury has superceded our state law.
If the Democrats want to really help the common man, they should enact national usury laws. There should be a national cap on interest at 10% (What stock returns so much with such regularity and with so little risk?) There should be a law that prevents new interest rates from being charged on existing debts…the “contract” entered into when the money was borrowed should never be allowed to unilaterally be changed. If money is borrowed at a particular interest rate, then that debt should carry that interest rate until it is retired.
I have heard the argument that the big financial institutions would stop lending to the poor if such laws were in place. That is utter nonsense! The credit card companies already make a 3% fee on EVERY purchase…add the 10% interest and you are looking at 13% on every purchase in the United States.
If that isn’t enough money for them to make huge profits, then they are not competent!