Protecting the Poor

Nearly 7 in 10 Americans find it difficult to minimize their debt and more than 1 in 4 Americans admit they do not pay their bills on time.

A Florida Issue

Florida currently has the seventh highest total of citizens with credit card debt in the country, and the Federal Reserve heightening the target rate means higher APRs and increasing the time it takes to pay off a credit card.

Florida beats the national average in every debt-related category.

Credit Card Loans

We Can:

  • Protect the economic interests of Floridians

  • Stop illegal interest rates

  • Enforce our State Laws

Unreasonable interest rate increases in the credit card industry are hurting Floridians statewide. Florida currently has the seventh highest total of citizens with credit card debt in the country, [1] and the Federal Reserve heightening the target rate means higher APRs and increasing the time it takes to pay off a credit card. Longer debt payoff periods are harmful to consumers and their credit scores, especially amidst the price gouging we see today. The Commissioner of Agriculture can solve this issue by implementing a cap at 18% for the maximum interest rate and regulating fees from the credit card industry, which can protect Floridians from these unfair practices.

 

Skyrocketing Credit Card Debt

Financial insecurity remains a pressing issue for Americans, as we see credit card debt in America is at an overwhelming $841 billion.[2] The rising cost of everyday goods and gas due to price gouging plays a key role in this period of instability. To neutralize these surging costs, there is a growing reliance on credit cards to assist during these struggling times.[3] The situation is at an all-time high, as the data below shows Florida beating the national average in every debt-related category. [4]

 

A higher APR caused by rising interest rates hurts cardholders who already have a balance. More money comes out of the borrower’s pockets to pay their monthly credit card bills and extra interest added to that number makes the debt balance take longer to pay off. Communities that are already struggling to pay their bills now face an additional cost that will take more time and money away from them. Nearly 7 in 10 Americans find it difficult to minimize their debt and more than 1 in 4 Americans admit they do not pay their bills on time.[5] A longer debt payoff time adds undue financial distress to the constituents.

 

Even More Interest

Credit card companies also charge a daily compounded interest, meaning that cardholders with a balance build up extra interest every day and end up having to pay more out of pocket. A total bill can increase substantially due to this, allowing credit card companies to rake in more money from the people, ruining their financial security. Accumulating interest on your balance also hinders consumers from having the usual 21-day grace period between your credit card statement date and the due date.[6] The grace period only applies to cardholders who do not have a balance. Credit card companies are actively working against the people through these cheap tricks by not allowing consumers to have a sufficient amount of time to pay off their debt. Adding extra interest digs a deeper hole and this leaves no room for those struggling with financial insecurity, as over a third of Americans (35%) reported their household financial situations have gotten worse just from the first year of the pandemic.[7]

 

Unnecessary Fees Hurt Your Bank Account

Large credit card companies rely heavily on charging a wide variety of unnecessary fees that in actuality, do not provide much benefit for the consumers. The Consumer Financial Protection Bureau estimates that companies accumulated almost $14 billion in late fee penalties just in 2019, disproportionately affecting those with lower credit scores.[8] Many of these fees, such as cash advance, and balance transfer will cost cardholders in the long run. It is vital that someone regulate these charges and ensure that credit card companies are not stealing from hard-working Floridians.

 

[1] https://www.lendingtree.com/credit-cards/study/florida-credit-card-debt-statistics/

[2] https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/

[3] https://time.com/nextadvisor/credit-cards/2022-credit-card-trends/

[4] https://www.lendingtree.com/credit-cards/study/florida-credit-card-debt-statistics/

 

[5] https://www.discover.com/credit-cards/resources/nfcc-survey-americans-worried-about-savings/

[6]https://www.zdnet.com/finance/credit-cards/compounding-interest-on-credit-cards-works-against-you-heres-how-to-beat-it/

[7] https://www.nerdwallet.com/blog/average-credit-card-debt-household/

[8]https://www.consumerfinance.gov/about-us/blog/americans-pay-120-billion-in-credit-card-interest-and-fees-each-year/

Education

So, What Can We Do?!

Under Chapter 687, Section 03 of the Florida Statutes,[1] it is considered usury for agencies to charge higher than 18% as an interest rate on lines of credit. This makes 18% the maximum interest rate and anything higher is deemed illegal and Chapter 687, Section 04 allows legal action to be pursued against agencies or representatives who violate section 03.

 

The Commissioner of Agriculture has the power to hold credit card companies accountable for their unfair rates by enforcing the interest rate cap of 18%. Under the Florida Statutes, Chapter 501 Section 202[2], outlines the power to “protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.” These rates are hurting Floridians and plunging them deeper into credit card debt, but the Commissioner can protect constituents by legally pursuing companies who act above the law.

 

[1]http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0687/0687.html

 

[2]http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0500-0599/0501/Sections/0501.202.html

The Rates are Illegal

Under Chapter 687, Section 03 of the Florida Statutes, it is considered usury for agencies to charge higher than 18% as an interest rate on lines of credit.