The Wall Street Journal reported that New York Representative Maurice Hinchey (D) has introduced a bill that would limit the maximum interest rate charged on credit cards to 15 percent. Citing abysmally low rates for savings accounts and certificates of deposit (CDs), Hinchey seeks to even the scales between what credit card issuers can charge customers and the interest rates financial institutions pay on deposit accounts. It’s not uncommon to find credit card rates over 15 percent and retail credit cards that charge interest rates over 25 percent.
“A spiral of debt” plaguing American consumers
Citing current economic conditions, increased bankruptcies and consumers struggling to make ends meet, Rep. Hinchey asserts that regulating finance charges on credit cards would contribute to a healthy economy. Hinchey says it’s time to end “legalized loan sharking,” but it’s unlikely that his bill will pass due to the split in power between the Republican majority in the House of Representatives and the Democratic majority in the Senate. Citing recent significant financial legislation, critics of Hinchey’s bill don’t believe that lawmakers are inclined to address further financial regulation this year. Nonetheless, Rep. Hinchey asserts that American consumers are being swept up in a “spiral of debt.”
Non profit debt consolidation services provide low cost debt help
If you’re struggling with credit card debt and can’t wait for lawmakers to act responsibly in favor of consumers, don’t continue paying high finance charges to credit card companies. Here are some options to get out of debt yourself and to seek affordable debt help.
- Personal debt management plan: Establish a repayment plan for your debts and set it up so that you can track your progress. Paying off debts with the highest annual percentage rates (APR) first can help reduce finance charges you pay over time.
- Debt consolidation loans: Borrowing money to repay debts can be difficult, but you may qualify for a debt consolidation loan online or through your financial institution. Unsecured debt consolidation loans require no collateral and are typically offered at higher rates and lower amounts than secured debt consolidation loans. These include home equity loans and lines of credit and vehicle title loans.
- Debt consolidation services: Non-profit debt consolidation services provide credit counseling and also work with your creditors to arrange affordable payment terms. You have to close active credit card accounts, and are required to pay administrative fees, but these services can help you get out of debt when you can’t do it yourself. Although they don’t reduce your credit card balances, debt consolidation services may be able to arrange reductions or waivers of interest rates and other finance charges.
Before filing bankruptcy, please consider getting debt help. Make 2011 your year to gain freedom from credit card debt.
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