‘It Will Not Take Very Long’ : Cut Up Credit Cards to Lower Interest Rates--Congressman

America’s 91 million holders of credit cards should cut up their charge cards or simply stop using them to force issuers to lower their excessively high interest rates, a House subcommittee chairman said today.

“What I am proposing is that the nation’s 91 million credit card holders put their plastic in their pockets and leave them there until interest rates drop,” Rep. Frank Annunzio (D-Ill.), chairman of the House consumer affairs subcommittee, said at the start of a hearing on the high consumer interest rates.

“It will not take very long for the message to get across,” he said.

“If enough consumers take their credit cards out of circulation . . . not only will rates go down, but you will see credit card issuers vying to see who can cut their rates to the lowest and to attract the disenchanted credit card users.”

Annunzio said that while interest rates have dropped below 10% since 1980, credit card interest rates have risen sharply to an average of nearly 19%. He said the reason charge card interest rates have remained high is that Americans are “addicted to plastic cards.”

Annunzio said that when credit card companies started charging an annual fee for use of the cards, the companies promised that the fee would help keep interest rates down. Changes in credit card billing also were supposed to keep interest rates down but that has not happened, he said.