Many Connecticut residents and others around the country carry a significant amount of credit card debt from month to month. If those consumers were told the interest rate for their credit cards was to be capped at 15%, it would apparently be good news for them at first glance. Since some of the cardholders with large balances are often in need of debt relief, this seems like a positive move for them. However, that plan could end up causing more financial strain on the very people it seemingly would help.
Some of the early contenders in the 2020 presidential race have discussed a plan to cap credit card interest rates at 15%, lower than the current total average of 17.73%. While this measure is not expected to pass immediately, some candidates are wanting to introduce their policies in this manner. The current average credit card debt per household is over $9,300. Those consumers who may take years to pay that balance off could benefit from a lower interest rate. The lower rate could considerably reduce the amount of interest paid over time.
However, there are consumers that do not qualify for the lowest rates available. These so-called “high-risk consumers” may have interest rates of 25% APR or higher. If interest rates are capped, the availability of credit may be tightened. Companies would not issue as many cards and those struggling may have to turn to payday lenders or other problematic sources just to make ends meet.
Those in need of debt relief may choose to contact a Connecticut bankruptcy attorney. An experienced lawyer will help individuals evaluate their situations and determine how to proceed. Having a plan in place will be the first step in getting one’s financial house back in order.