Rate Cap Amendment Fails
Rhode Island Democratic Senator Sheldon Whitehouse wants you to
pay less for your credit card than you are currently paying. He
feels that the amount of interest that the credit card companies
charge you for borrowing their money is too high and that it
should be reduced. However, the Senate did not feel the same way
and voted down an amendment that would have saved the American
public quite a bit of money.
The way it currently works is that the credit card companies can
locate anywhere they want, and they have to abide by the rate
cap in that state on what they can charge their customers. If
Minnesota’s rate cap was 15% and Arizona’s was 35% - they could
move their company there so that they can charge you more money.
However, the amendment made it so that it did not matter where
the credit card company was located, they could not offer a
higher interest rate than the state that their client lived in.
So if they are in Arizona and the rate cap is 35% but you live
in Florida where it might be 10%, they could not charge you more
than the 10% that your state has stipulated.
Whitehouse said that these credit card companies have been
allowed to charge whatever they want for far too long and that
the American consumer needed to get better control over where
their money went. He wanted to see struggling consumers get a
break on their cards so that they might be able to reduce the
amount of debt that they had.
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