President Trump said something recently that could bring the Right and the Left together in a common cause. He wants to cap credit card interest rates at 10% for at least a year.
That puts him in good company: St. John Paul II, Benedict XVI, and Francis.
All three popes condemned excessive interest rates or, in a word, "usury." The Church has always taught against the practice–everything from credit cards, to payday loans, and other schemes that trap people into high interest rates.
Many lenders like to tout the freedom that comes with available credit, but scratch the surface of that freedom and you'll find high-interest slavery for the desperate, the poor, the young, the uneducated, anyone to whom immediate access to cash seems too good to refuse.
Whether he realizes it or not, on the issue of sky-high interest rates, the president has the most Catholic position on credit cards of any president in generations!
There have been congressional attempts to rein in credit cards but they haven't been successful. Just last year, bipartisan bills establishing a 10% credit card interest rate cap were introduced in the House and Senate but languished without passage.
Hopefully, with President Trump's leadership, these bills will gain some traction. This is exactly the kind of relief Americans need to help with the all-important issue of affordability.
Why? Because they're drowning in credit card debt. At the very least, they're treading water frantically to stay afloat in a sea of debt totaling more than a trillion dollars. And they aren't paying it down. Roughly 46% of credit cardholders carry a balance month-to-month with average balances ranging from $6,000–$7,900.
And what are the interest rates? On average, they range from 19–23% with store and private label cards coming in at 30% or more.
While banks may cry doom and gloom over such a proposal, a study published by Vanderbilt University found that the effects of a cap would be quite beneficial, with Americans saving $100 billion in interest per year and banks still able to make money on most credit card users, if they cut back on reward programs.
Another path is to revisit the 1978 Supreme Court MarquetteBank decision allowing national banks to charge the rate permitted in their home state nationwide. That prevented many states from being able to set their own caps, leading to higher rates. Congress should return the right to set interest rates to the states.
Let's all pray asking St. Anthony of Padua, patron of those suffering from debt and predatory lending that this bipartisan effort to reduce credit card interest rates will succeed.
Go forward bravely,
Kelsey Reinhardt President & CEO, CatholicVote
Paid for by CatholicVote Civic Action, a 501(c)(4) organization., PO Box 3310, Carmel, IN 46082 (317) 669-6127
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