Financial consultant Doug Nicholas, says that credit card interest rates can be reduced. He said this to answer complaints of credit cardholders about their “powerlessness” in the interest rate hikes that have been prevalent due to the Credit CARD Act.
Nicholas states the government is already doing its best to protect the interest of the credit cardholders. The government reviews the rates and takes action to make sure that should there be increases in interest rates, they are fair enough to the consumers. The government is also working with regulators to set limits on credit card interest rates should there be final decisions to increase.
The government sees retention of existing interest rates without any increase in them as reasonable, should the banks fail to substantially justify increases, Nicholas relates. This is in cases where the fees themselves are justified to begin with. Most importantly however, should the government along with other regulators, find that fees were unreasonably increased or added to the already existing ones, without any proof of necessity by the credit card companies, Nicholas states the government can even reduce the fees or abolish them altogether.
The government is now reviewing coverage of bank charges and personal insolvencies for possibilities of reduction. Nicholas states further, that the treasury and business departments can help individuals in financial troubles with their borrowing capacities given the tight lending standards of 85 percent of banks.
According to Nicholas, the government reviews includes:
- Proposing solutions to unfair bank charges
- Allowing individuals to return their store cards without being fined for doing so after the prescribed period has lapsed
- Capping interest rates of store and credit cards in cooperation with the regulators
- Making credit card issuers generate electronic information on better deals to encourage the consumer to opt for the company`s other less expensive offers.
Consumer Minister Ed Davey said that hopefully, the government initializes the practice of clear-cut solutions to debt problems encountered by millions of Americans across the country. He adds that there may be a multitude of solutions offered to credit cardholders every time financial troubles are encountered, yet not one of these solutions seem to concretely provide the benefit.
Davey says that hopefully, the solution, which is reduction, is within the capacity of the government to secure for its citizens, given their vulnerability and financial instability.