While a rate cap does sound good on the surface, I actually believe that a rate cap could do more damage than good.
Little Rock, AR (PRWEB) February 8, 2010
An informal poll recently conducted by CardRatings.com -- the most comprehensive free source for comparing credit card offers -- found that a majority of consumers do not believe the proposed legislation capping credit card interest rates at 16 percent will have unintended negative consequences. Of the 1003 respondents, 597 poll takers -- more than 59 percent -- did not believe the new law would have negative effects, while 406 poll takers -- nearly 41 percent -- disagreed. One of the credit card industry's leading experts weighs in.
"The results of this poll are pretty clear - most consumers think that a rate cap would be helpful," CardRatings.com founder and consumer advocate, Curtis Arnold said. "While a rate cap does sound good on the surface, I actually believe that a rate cap could do more damage than good."
The legislation capping credit card limits at 16 percent is a stipulation of H.R. 4300, the Restoring America's Commitment to Consumers Act of 2009, sponsored by Representative John Tierney (D-MA). Arnold believes capping rates may not be the answer and that consumer education might be a better approach.
"I think consumers have witnessed all the unintended negative consequences associated with the sweeping credit card reform that will go into effect in February," Arnold said. "The American consumer is starting to wake up to a sobering reality - the best defense against the credit card industry is credit education, not government regulation."
CardRatings.com has been educating consumers about credit cards since 1998 and has been featured by hundreds of media outlets, including The Wall Street Journal, Good Morning America, The New York Times, and The Today Show. Thanks to consumers, CardRatings.com has become the most comprehensive free source for comparing credit card offers and has helped over a million people find the best credit cards for their individual needs.
Curtis Arnold is available for interviews on this topic and others relative to the changing trends in the credit card industry.
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