Banks must provide credit cards with reduced interest rates and fees. Banks would have to provide a "low-cost" alternative with 15% interest and no yearly charge.
This is unwise for several reasons. First, it would disrupt the market and give the government too much power over credit cards.
Second, consumer prices may rise. Banks will likely raise pricing on other goods and services to compensate for increased interest rates and fees.
Third, it would hurt low-interest credit card holders. Even if they like their card, these users would have to switch to the "low-cost" alternative.
Fourth, enforcement is tough. Banks might exploit several loopholes in defining a "low-cost" credit card.
Fifth, it wastes public money. Implementing and enforcing this new regulation would cost the government a lot.
Washington lawmakers' credit card proposal is awful. It would hurt the free market, increase costs, hurt people with low-interest credit cards, be hard to police, and waste public money.
Instead of this new legislation, the government should educate customers about credit cards and help them manage their finances. This would better assist customers.
The government should also target predatory lending. This would safeguard customers from predatory lenders.