Federal loans for credit card debt
Re: “House approves credit card reform measure,” May 1:
Congress is missing the point with this bill. Whether credit card companies provide three days’ or 45 days’ notice that interest rates are being raised to 29% doesn’t give cardholders the ability to pay off the balances or see their monthly payments soar.
The real issue here is the reported $500 billion in outstanding credit card debt in the U.S. With interest rates jacked up to 30%, this debt is a time bomb waiting to explode and block economic recovery.
Here’s a proposal: Instead of giving more money to the banks, the feds should loan money directly to credit card holders conditioned upon them paying off their credit card debt.
This will benefit consumers because their credit card debt will be erased, and loan payments at 2% instead of 30% will free up money and increase consumer spending.
At the same time, the banks will receive a $500-billion capital infusion and erase toxic debt off their books. It’s a win-win solution.
Steven Fondiler
Oak Park
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