[volunbeer]

Let’s use liberal logic if we are going to tell banks what they can charge for interest. You know, the same logic they apply to minimum wage?

Why cap them at 12%.

I think 4% sounds much better and look at all the folks it would help!

Cancelling the only citibank card we have today. It is a retail card and we always paid the balance - got good cash back rewards too, but every person should fight back however they see fit and its a small price to pay!

[freeandfreezing]

It is easier to argue that 12% is plenty. You are correct that in the current situation with very low fed lending rates they could make plenty of money with 4 or 5% interest rates, but 12% or 10% is a nice round number and leaves them plenty of room to make money. They are paying 0.04% on savings accounts, so they have plenty of margin between their cost of funds and their max interest rate.

Back in the 1970s there were profitable banks that paid in the range of 5% for savings accounts and loaned money at 12%. So Citibank and all the others could live with reduced interest rates.

Capping interest rates would also provide a huge stimulus to the economy as consumers saw their monthly credit card, student loan, and car payments drop. Most mortgages would not be affected since they have rates below 10 or 12 percent already.