I agree that interest rates are rediculous on all credit cards. 18-30% when prime is.025% would have been called long sharking in my younger days. 5% above prime is more than generous considering that they only will give you 1-1.5% on your investments.

In response to Robert. Stop pontificating! You are in no position to judge others when you have no idea what their circumstances are. Hmmm lets see...did they lose their job? get injured on the job? get laid off? suddenly take sick? Have a sick child? It makes me ill to read your responses. If you are able to pay off your Cc's in full - good for you, but the majority of people are not so fortunate. There's the high interest rate issue but also the additional fees like charges added on by the Cc company if you have not paid off your balance. Who can win on that one! The average joe has been squeezed dry! I agree with Dennis that the maximum interest should never exceed 10%. What really burns my butt is when banks/Cc companies solicite students to get credit cards. What a way to start out in the world. Vera, keep your head up. It sounds like you have come a long way :)

People, please don't confuse credit cards with personal loans. Many of you seem to believe this is free money or some special entitlement you have. If you are broke, you are broke. End of story. If you have no money, don't borrow from anyone and suggest that your situation is their problem. Interest rates can be whatever the companies choose to make them and that is the nature of business. If you don't like the rates, don't borrow. The whining about rates makes me laugh.

Well I have a great suggestion. THe banks are collecting a lot of money on the credit card interest. They are also making huges profits.

Why dont the banks divide the profits among the credit card holders are the end of the year.

There is very little reason a company should have unusually high profits.

Be like a credit union -- at the end of the year you get a bonus based on the amount of interest you have paid for your loan. That way everyone is happy.

A credit card is not a personal loan vehicle. It should not be used as such by ANYONE, no matter what their circumstances.

The proper way to manage credit is to have a loan, ideally collateralised with a low rate and to pay debts from that if the cash is not available.

High interest rates on credit cards and foolish consumers who elect to carry balances because they spend more money than they ought to without doing ay financial planning allows me to profit from cash rebates offered by my card issuers. Capping rates will mean that those of us who do pay our bills will lose the perks from having done so.

I am getting tired of the government regulating our lives in accordance with some grand plan to protect those who are too foolish to protect themselves. Everyone is NOT created equal. What ever happened to Caveat Empotor - Let the buyer beware?

People who get scammed because they went to unlicensed financial advisors who promised higher than reasonable returns ought to suffer their own losses . . . no one compensated me what MY broker lost a whack of my money in spite of my gentle requests to get me out of the market.

Quebec dwellers (I hesitate to use the term citizens) will soon have the luxury of paying huge tax increases disguised as electrical rate increases because that provincial government spends money like a drunken sailor - overpaying for everything (and especially shoddily built civil works projects) so that their buddies can get rich.

Hydro Quebec already makes BILLIONS in profit and the consumer is theoretically the owner of the utility.

Now they're talking about billions for unneeded transit expansion - all of the beneficiaries of those improvments COMBINED will never contribute that much money in their lives to government coffers.

The government seems to have it backward . . . those who PAY for government should have a say in it's operation. Not the slugs who steal from it or those who drain it dry without contributing.

In California they are talking about banning certain big screen TVs because they are not energy efficient - only poor people will suffer from that ban - we do NOT need a nanny state. There is already too much regulation in our personal lives.

What we need are fiscally responsible governments who have the balls to cut services and the drive to maintain existing infrastructure BEFORE expanding and buying things that it can't afford.

And we need people to take responsability for their own actions.

A credit card is necessary for many things (renting a car).There is a thing called a secured credit card. Get one, use it only when 100% necessary, and you won't have a debt to repay. And please, take responsibility for your own actions. That card wasn't forced on you, you took it voluntarily!

This is just another ploy to delay much needed changes. How can anyone in good conscience defend a govt policy that allows banks to charge 18/19 percent, sometimes ,at a time when prime rates are at historic lows. How does this grace priod help anyone? Those who are aplauding the changes are just trying to fool us. This is no reform. The banks are laughing; look at the killing they r making.

remember this. the road to bankruptcy is paved with credit cards

OK I tried to post a lengthy comment but received a messgage stating you could not accept my comment...what gives?

Credit card rates should be regulated by the gov't and rates should be tied to the prime rate charged to the banks. The interest rates on credit cards used to be much lower before everything spiked in the early 80's and mortgage rates rocketed to 25% and Canada Savings Bonds were paying out 18%. Credit card companies followed suit out of necessity to cover their credit committments. Paying high rates seemed in tune as it was within a few points of prime. The problems started when interest rates fell, the companies did not follow suit. Most people I dealt with at the bank paid their balances each month and didn't notice the that the rates remained at their all time high. Also back then not as many people had credit cards and if so only 1. The problem nowadays is that people use thier cards as extended credit rather than a convenient way to pay for items you HAVE money for. Also it is way too easy to obtain a card. We regularly receive "preapproved" credit card applications from companies such as MBNA. In fact we still get apps for my father-in-law who passed in 1979!! Did you know that if you pay your bill in full each month your credit score is NOT as good as some one who makes partial payments! The cr companies don't make money from you! That's why my friend who is a single parent making $10.50/hr managed to rack up $50,000 in credit card debt.(How does anyone get a $20,000 limit on a Sears M/C with an income of $20,000?) The government needs to step in and regulate the rates and how cards are issued. Company shareholders will squawk but they are not the ones who are going to turn our economy around.

There needs to be another provision as follows.
Many credit cards already don't charge you interest if the balance is paid in full within a given time period. However, there is a gray area that needs to be addressed. Suppose your balance is $ 101.58 and you make a mistake and submit only $ 101.53 i.e. a 3 and and 8 look pretty alike. Since you did not pay in full your are now liable for the 18% or more interest payment on the whole balance not just the $ 0.05. There has to be a rule that an error of say up to $ 10.00 can be made without having to pay interest on the whole balance.

If you don't like the interest rates, don't get a credit card!

We should all try to decrease our credit card usage. Spend a little bit less every week. If we all do that the collective impact will be significant enough to put the pressure on the lenders. I remember 30 years ago credit cards were a sign of wealth. Now the poor have more credit cards than ever. It is a predetory tactic.

I think this is a beginning, however, not enough. What is absolutely necessary is to cap the interest rates. Right now the consumer is at a disadvantage no matter what way you look at it. This needs to change. Carrying a balance is sometimes unavoidable, however if the interest rates were lower, at least it would help.

As with most topics there are several sides to this question. Generally I think that there is not enough education about money & debt. We need to have more ed. in school; the earlier the better.
E.G. is there 'good' debt? Yes there is. If the money borrowed is for an investment that makes more in interest than that charged for the loan! Hard to do that these days, and certainly not with a credit card! So an upper limit on interest rates would help. And ban all that fine print which is a recipe for gouging!
Pesonally I like the credit rating idea - the higher the rating,the lower the interest rate. And there almost certainly should be some flexibility in the Co.'s to accommodate 'good' debtors in the proven event of sickness or unemployment.
But let's face it folks, if the banks etc don't get their profits one way they'll get it another, such as bank fees: & if you're an investor in bank stocks you'll want the profits!!!

I rarely use a cc but realize people must, with low wages, families, and high costs,plus unexpecteded illness, job loss etc. I think Melanie's point is defintely very valid, there is no reason for that except greed. But the main thing that should have been done years ago is the capping of interest rates.Why should cc companies have the privilege of setting rates that are unreasonable and get away with it. It is comparable to phone rates when there was only one carrier. That has not been done so the rest won't help.

There are various card options
I have 2 Visas from the same bank. One is at 5-1/2% with no frills.
The other gets 'points' covers car insurance, and has other bells and whistles for 19%
For people who use cards responsably, there are good low-interest options for short-term credit. For those who do NOT manage their funds effectivly, there are higher rate options. Banks (and Dept Stores) set interest rates according to RISK. Cards should be a short-term convenience. Those who carry a max-balance for years on end deserve high rates

Well All I can say is that I got a Card when I was young you get it when you don't pay a cent event at Leons/Brick well my advice first off is DON'T DO IT!!!!I lost my Job a Month before it was due and didn't have any money to pay it down it was 2000 bux well interest +ADMIN FEES!!!which are charged every month it racked up a month later I had a descent Job and was determined to pay it off with 300 bux a Month I was on my way right Nope After 10 months or equivilant to 3000 bux my ballance went from 2400down to 2000 original Ballance unbelievable but true they will Rob you blind and not blink about it I now carry a Visa with a very comfortable Credit Limit am older and wiser my interest rate is 11% and my ballance at the end of each month is 0 its a hard lesson learned but it shows that its too easy to be trapped my the fly by night credit people MBNA is one they reel you in with 4.9% offers and the person who said earlier that the interest rate is right there on the contract failed to mention the companies like MBNA hide it in very small writing about 1 onehundredth the size of the 4.9% rope in and in small letters its for a Very limited time very cheeky and sneaky but definately stay away from DON'T PAY A CENT EVENTS if you are not 100% sure you will pay it off on time because they will sink you

As noted in the article, it is the 'parasitically' high interest rates that do not match the financial reality of the recession. When Prime is so incredibly low, credit card companies can certainly be likened to carpet-baggers.

The Conservative government can and should address the real problem - immediately.

Now about collections first off it is your right to tell the collection agency that they are to stop Phoning you and to only correspond with you by MAIL if they don't stop you will contact your phone company and charge them with harrasment and that means all communication because they do not have a problem with calling you at work either if they don't stop the phone calls then you can have them charged with Harrasment and I suggest you do so also during the phone call get the persons name(it will likely be false)and the companys phone number what will happen is likely they will end up selling your account to another collection agency who will phone again oh yes and they will get down right nasty when you tell them all future dealing must be by mail only laugh and let them ramble on because you do not have to take their garbage and threats you have rights but they are counting on few people knowing this also they will not Sue unless its a very large amount(there are a few who will)but generally it is not worth it too them so they will harrass you