Obama is demonizing Credit Card companies for charging too much for credit. What he doesn’t realize because he has never been in any business discussions in the real world is; if you can’t make money you stop doing the business.
What he will do is hurt the people that need credit the most. Credit Card companies will no longer lend to high risk borrowers if they can’t charge a rate that protects the creditor.
If you had a thousand dollars to lend through a credit card company you created and could only make 10% on the money who would you lend to? The person capable of paying you back or someone you are not sure can? Now if you can charge 20% for the same thousand dollars are you more willing to lend to a multitude of people since the money you make can offset a few losses?
If his plan to limit interest rates goes through he will hurt the same people he says he wants to help. This is such common sense why can't he see?
It’s simple business strategy and capitalism. Something our president knows nothing about!
PMITEWAP!