2007-12-06 06:45:24 · 8 answers · asked by Myself 2 in Business & Finance ➔ Credit
That would be wonderful but then again, the credit companies would probably go out of business.
2007-12-06 06:48:32 · answer #1 · answered by ***~*** 6 · 0⤊ 0⤋
I guessing that you are speaking strictly about capping credit cards and not other forms of consumer credit, ie mortgages, car loans, personal loans, etc.
Putting a 10% cap on credit cards would not be in anyones best interests unless major changes are set in place and enforced since so many aspects of a persons life is based on credit and credit history.
Major credit cards have the most impact on scores over any other type of credit. The "whole" (as in all, not simply credit card) credit industry would have to make costly major internal changes to compensate for the forced lower scores. That in itself will financially hurt all industries since the credit base would drop dramatically for every credit aspect and not just credit cards.
You would see the impact in higher prices and interest for - well - everything.
The government, and every state, would have to spend billions of dollars to write, rewrite and enforce new credit laws including credit protection laws.
Some of those forced limit credit protection laws would have to include protection from harming those who seek employment, insurance, vehicle loans, mortgages, home/apt. rentals, etc.
Right now people have a choice to either have credit, have limited credit or have no credit.
Those that choose limited credit, or no credit, WILL pay higher rates for mortgages and other loans, have to use an "expensive" underwriter for a mortgage, pay higher rates for insurance, the chance for being denied employment or rental property, etc., etc., etc.
Our society is a credit based society. Do I personally like the fact that it is? No. But since it is set up that way, along with many other people, I take great pains to understand credit and to make credit work for me (instead of me working for credit).
It would be a "costly and major" overhaul of government/state laws and the business industy as a whole.
Thats not even including the flood of lawsuits that would follow..
It would cost a pretty penny - how much would you be willing to donate for the cause?
2007-12-06 17:30:11 · answer #2 · answered by echo 7 · 3⤊ 0⤋
Credit should be used for emergencies only. When you have an emergency, such as a medical bill, job loss, or tax issue, you will be glad there is no credit limit based on your income.
2007-12-06 15:12:28 · answer #3 · answered by mike 2 · 0⤊ 0⤋
Good idea, but then who would create a system to track incomes of people and make sure they don't exceed the 10%? What I make one year might vary from the next, if I've already overextended myself one year and make less, are you going to stop me from getting credit???
2007-12-09 14:37:42 · answer #4 · answered by mochachreme 3 · 0⤊ 0⤋
No, the last thing we need is the government stepping in to protect irresponsible people from themselves.
When credit card companies stop making profits, they will re-examine their standards for extending credit. In fact, many have already done so.
2007-12-06 14:55:04 · answer #5 · answered by bdancer222 7 · 3⤊ 0⤋
Who is to "enforce" the cap? That should be up to the lenders to judge.
2007-12-06 14:53:25 · answer #6 · answered by npk 7 · 0⤊ 0⤋
Once again.....Echo displays such insight. I agree with her 100%. I could not explain it any better.
SALUTE!
2007-12-06 18:24:23 · answer #7 · answered by Anonymous · 0⤊ 0⤋
u'd have the lenders spending millions to infuence ur poltician.
2007-12-06 15:22:08 · answer #8 · answered by Anonymous · 0⤊ 0⤋