Can high credit card interest rates promote recession?
What is the difference on fighting a recession with lower Fed rates of interest and lower credit card interest rates (including associated charges).
Please include an estimated time lag difference in effects as well.
Yes,because it lessens the amount of money you would have for future purchases.
Actually, high credit interest rates USUALLY help fend off recession, if you think about it: in a free market, the interest rate you qualify for depends on how well you have handled loans (which is all a credit card is!) in the past. The better job you have done, the lower rate you qualify for.
Consequently, people who are lousy at handling money typically end up with prohibitively high rates, whereas those who “oil the wheels of commerce” with their better money skills will get the lowest rates, encouraging them to keep on doing whatever they are doing.
When government gets involved in the personal debt industry(other than to prevent the stupid from fraud), good things rarely happen…