U.S. President Barack Obama has told America’s credit card industry to stop the abuse: He’s calling for an end to unfair credit card interest rates.
In Canada, both the House of Commons and the Senate are looking at credit card reform. But unlike in the U.S., our top political leader, Prime Minister Stephen Harper, has offered no leadership on the issue.
The NDP has tabled a motion calling on the federal government to bring ‘credit card relief’ to Canadians.
They have the support of the majority of Canadians. According to a new Environics Research poll, 82% of Canadians agree with tighter credit card regulations. And for good reason.
Many Canadians have fallen victim to credit card interest rates in the 20-30% range. At that price, it’s a challenge to squeeze just enough out of a paycheque to pay down the interest, let alone the balance. One-third of Canadians do not pay off their credit card balances at the end of the month.
More manageable interest rates would make a significant difference in the lives of most Canadians.
Despite the leadership void at the top, the issue has finally taken centre stage on Parliament Hill.
The day before the NDP introduced its motion in the House of Commons, the Senate was holding its own review of the credit card industry — and they brought in the big guns.
Executives from the world’s biggest credit card companies were on Parliament Hill defending their practices and virtually telling Canada’s government to butt out.
According to Global TV, the president of MasterCard Canada accused merchants calling for credit card regulation of politicizing a private sector issue. The head of Visa Canada essentially warned new regulations would drive up costs for consumers.
When it comes to credit cards, the industry has been acting as though we still live in the Wild West, charging outrageous fees like they own the place. In the U.S., President Obama is making it clear there’s a new sheriff in town and he means to bring law and order to Dodge.
Will our own Prime Minister show the same leadership? The NDP motion will be voted upon next week.