To: President Donald Trump, The New York State House, The New York State Senate, Governor Andrew Cuomo, The United States House of Representatives, and The United States Senate
Consumer Debt Interest Relief
We need to regulate short consumer term debt to help Americans get out of debt and thus have more available spending money to stimulate the economy.
Example:
- Minimum interest rate of 4%, or prime rate, whichever is higher
- Maximum interest rate of 18%, or 3 times prime rate, whichever is lower
- Maximum interest rate increase of 2% for late payment
- Maximum late fee of 1% of outstanding balance, or $30, whichever is lower
- Interest rate deduction of 1% for 2 months of on-time payment
- Minimum payment calculated to pay off current balance in 2 years
Example:
- Minimum interest rate of 4%, or prime rate, whichever is higher
- Maximum interest rate of 18%, or 3 times prime rate, whichever is lower
- Maximum interest rate increase of 2% for late payment
- Maximum late fee of 1% of outstanding balance, or $30, whichever is lower
- Interest rate deduction of 1% for 2 months of on-time payment
- Minimum payment calculated to pay off current balance in 2 years
Why is this important?
Many middle class American families struggle to get out of “short term” debt, like credit cards. And it’s small wonder, with creditors jacking interest rates to 30% for late payment. Oh, sure, they’ll offer a very low introductory rate as low as 0%, but late payments result in that interest rate being increased to the maximum rate allowed by law, and that rate is never reduced. Coupled with low minimum payments, it is a recipe for “short term” debt to become “life long” debt. And it contributes to economic stagnation, as debtors continue to pay off debt rather than making new purchases.
I personally have at least one credit card with a 30% interest rate. It has a $0 balance now, as I had transferred the balance to another card with a 0% introductory rate, which I hope to have paid off within a few months.
Regulation of short term debt, like credit cards, should have been addressed as part of the government bailout of the financial industry.
I personally have at least one credit card with a 30% interest rate. It has a $0 balance now, as I had transferred the balance to another card with a 0% introductory rate, which I hope to have paid off within a few months.
Regulation of short term debt, like credit cards, should have been addressed as part of the government bailout of the financial industry.