Avoid paying for high interest rates on credit cards
WASHINGTON (DC News Now) — The “buy now, pay later” convenience associated with credit cards is part of the allure of adding plastic to consumers’ wallets. At the same time, missed payments can lead to heavy penalties given the high interest rates.
Macy’s informed a cardholder – also a DC News Now official – that its annual interest rate was approaching 30%.
As consumers consider subscribing to retail credit card programs during the holiday shopping season, DC News Now found several retailers that also include high interest rates — Kohls’ rates range from 22 at 25%, while Walmart is set at 27%, according to published terms. by retailers.
“Could you imagine a landlord charging that if you’re late on a payment,” asked Beau Correll, a personal injury attorney.
Correll added that companies can charge high interest rates due to caps set at the state level — headquarters in states with higher caps means leeway to charge consumers more.
“There is no overarching federal law that determines what the cap is,” he said.
Virginia-based defense attorney Russ Stone said if companies are upfront with consumers about the interest rates included in their plans, the companies are likely not breaking any laws.
“If you’re fully informed and aware that you’re committing to a 29% interest rate, you’re probably going to be stuck with that 29% interest rate. But if you didn’t know that, if you weren’t not informed that it was something that you signed up for, then you get into the realm where there might be something that can be done about it in a criminal way,” Stone said.
Calling insurance companies to negotiate interest rates based on good credit can also be helpful. Avoiding using credit cards for big expenses like rent and utilities can avoid interest rate penalties if consumers don’t have funds immediately available.
Consumers who believe they are the target of predatory lending can contact their state attorney general’s office.