Posted by William Charles on May 10, 2019
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Published on May 10th, 2019 | by William Charles

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Recap: Marriott Free Night Certificates Can Be Used For Upgraded Rooms, 15% APR Cap & More

 

  • Sanders, Ocasio-Cortez Propose 15% Cap on Credit Card Interest by Bloomberg. Personally I don’t see the interest rate cap as a good idea, just means less creditworthy individuals will be unable to access credit cards and will be pushed onto other products with a high APY. Introducing banking at post offices is an idea what has worked successfully in other countries, if that were to happen then I think it would be wise to focus on the unbanked rather than on loan products. If you’re going to leave a comment about this particular story try to make it informed and actually contributing to the conversation rather than the usual political bickering.
  • I’m not an expert, but this probably isn’t the best way to get people to not join a union. Seems particularly condescending for some reason

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mk712
mk712

Bit misleading on the title there, I got unreasonably excited: “Marriott Free Night Certificates Can Be Upgraded” should be “Marriott Free Night Certificates Can Be Used To Book Upgraded Rooms”.

Current title makes it sound like you can combine the certificates with points or cash to book rooms at higher category hotels, which would be huge, but is not the case.

Mr. Emoji
Mr. Emoji

+1

Izz
Izz

Yeh was thinking exactly the same too!

William
William

Not just misleading, but completely incorrect. Unusual for DoC to do such things.

Emporio
Emporio

A reminder from history: From 1911 – 1967, the U.S. Postal Service offered savings accounts at post offices, but a drop in deposits led to their discontinuation. What makes these democratic socialist candidates think that the post office will now be able to attract enough in deposits to be an economically viable banking entity? Banking in 2019 is far more competitive than the years of the post office’s attempt at banking. If this happens then the only way it succeeds is if the post office auctions off a monopoly license to banks to offer banking services with the caveat that the winning bidder take on all capital expenses. That would certainly provide a healthy capital infusion for the post office but what benefit does that bring to the unbanked to have a Wells Fargo or U.S. Bank branch at the post office?

Zaos
Zaos

Amend the law to allow, but not require, the post office to offer this and other commercial products. In other countries, people go to the PO to pay bills. Why tie the PO’s hands?

Sam
Sam

Should we “allow” post offices to administer primary care checkups and maybe do low cost oil changes and oh maybe they could open centers to provide free childcare too? the democratic socialist crowd is obsessed with the idea of greater government control and overreach into the private sector, regardless of how logical it is. what service would they even be providing that is not already freely accessible? there are plenty of banks that offer free accounts, even high interest savings account. the unbanked are a sad bunch to attract, just check your local walmart money center. post-office is already miserable enough place, i dont really want to wait for 10 people in front of me to moneygram $50 to some child trafficking kingpin in honduras

p.s. just allow aoc and bernie to skate by the fact that credit interest rates are high not simply due to the cost of borrowing, but the major factor being credit risk. anybody will learn in an intro business class that for economically feasible lending to take place, interest rate needs higher than default risk. you want student loans to get wiped out in bankruptcy proceedings? that’s great, say hello to higher interest rates

Leo
Leo

Can’t imagine many under the age of 75 wanting to bank at the post office. Makes me glad we can’t MS there any more! If they promise to get rid of 50% of the line at WMMC, though, I’d be all for it!

Beefer
Beefer

I agree 100% about the APY cap. If you’re stuck in credit card debt you have options.

Federally operated debt management programs would be much better. People with poor credit and cc debt need a way to close their cards and consolidate their payments into a lower interest single monthly payment.

Our current system for DMPs is privatized and super scammy. Plus people who are heavily reliant on credit are averse to them because if something comes up they will lack options to pay for it.

A subsidized debt repayment system is a lot better than just capping APYs. High APY ccs are hardly how banks make their money. It’s just essentially insurance in case you don’t use the card the way they want you to.

It’s a terrible problem with no easy solution. This certainly isn’t a proper solution.

JoeHx

It took me too long to realize DMP = debt management program.

Sam
Sam

i think i’d prefer not to enter into a financial situation in which taxpayers are responsible for covering people’s personal credit debts when they decide to file for bankruptcy–which is precisely what would happen under your proposal. that’s a venture better left to the private sector where risk and reward can be properly weighed and considered. the government has a very poor record of managing risk (see: fannie and freddie)

LlamaOfDoom
LlamaOfDoom

And yet look at China, a country where the country directly controls huge chunks of the economy including the financial sector (there’s only one domestic bank that’s not state-owned, all credit cards have the same government-dictated interest rate of 0.05% daily, savings interest rates are only allowed to be set within 10% of the government’s guideline rate, etc), and is predicted by quite a few to take the role of leading world power from the US. Yes, if you choose to bring it up, it’s remarkably repressive in terms of speech, but that doesn’t really have anything to do with its financial standing.

Craig at Middle Age Miles

Hi Will – Many thanks for the title link in today’s recap! We appreciate you getting the Marriott certificate news out to a broader audience as we think it can be quite useful to the community. ~Craig

Dan
Dan

The naivety in thinking that one can legislate a market is amazing. The market is extremely complex and full of moving parts. The only accomplishment out of such legislation is market distortion by moving the equilibrium price (legislated) and quantity of credit down, as sellers react. As you correctly point out, this will simply cut off the riskier borrowers from access.

Instituting a FIXED (as opposed to variable) cap is an even stupider idea, as when interest rate rise, this cap may be too low to allow even people with stellar credit to retain access to credit.

These proposals are popular only with people who are ignorant of how markets work by assuming markets are static and we can legislate one part without affecting the whole.

Want to see what happens with price controls or mandated cross-subsidies? – Just look at the real estate market (including rents) on the west coast or healthcare market anywhere in the US. More market-distorting legislation just makes things worse.

Frank

As Will mentioned, you would just make the problem worse — credit card companies charge high interest rates to make a profit which subsidizes the rest of their operations. With a interest rate cap they would just remove all their “high risks” which would leave LESS people with access to credit.

Furthermore, 15% interest rate seems like a “high rate” now but historically interest rates have been much higher leaving significantly less margin for these companies.

While Post Office banking seems like a good idea (poor people do need an option) the issue is you end up with a government program competing vs a free market — you either harm the market (if chase doesn’t have people overdrafting, they can’t pay good interest rates, which means they get less deposits and can make fewer loans) or create a large government subsidy (i.e. literally the current Post Office).

In an ideal world you would think the Federal Reserve should just offer deposit accounts and cut out the need for the banks….until you realize that banks intentionally exist to drive the economy via “credit transformation” (take short term money and put it into long term loans). That’s why TNB (The Narrow Bank) had it’s bank charter denied by the Fed despite promising to be the lowest risk bank ever

J T
J T

“create a large government subsidy (i.e. literally the current Post Office)”

This is factually incorrect. The USPS is funded through the sale of its products (postage) and other services. It does not receive money from the federal budget.

Aahz
Aahz

The word “subsidy” does not mean “money from the federal budget”. As of 2015 the USPS was receiving as much as $18 BILLION in sibsidies that had nothing to do with receiving money from the federal budget. – http://fortune.com/2015/03/27/us-postal-service/

JMR0303
JMR0303

And yet notice that most of that number is composed of an imagined “subsidy” from the fact that it’s the only entity allowed to deliver directly to mailboxes, something that’s standard practice and kinda important to the orderly delivery of mail. If anyone and everyone can stuff your mailbox then things would become quite messy quite quickly, for example, in the realm of junk mail. Or, for example, international mail- what decides who delivers inbound mail when no provider has been specified?

joe
joe

Dont you mean APR?

Ann
Ann

Good comment from FicoForums:

“Be careful what you wish for, a 15% apr cap would kill all sub-prime lending, kill most store card lending, and limit approvals to 720+ credit scores all with lower credit limits. Credit Card debt is packaged and resold through the bond market capping “margins” would in fact limit total credit card lending.”

Denis
Denis

From our community perspective, limiting APR means banks are going to lose money on interest which will make them to reduce costs and pay closer attention to churners/cc enthusiasts, add more restrictions to bonuses etc.
5/24 is pain for many, but what about 5/48?

Andrew
Andrew

The PO banking proposal is just a weak attempt by the far left to try and keep the Post Office (and their over-compensated, union-paying employees) relevant in the 21st century. We should be trying to trim-down the services this over-bloated organization provides, not the other way around. I agree that poor people should have access to banking, however using what is already an archaic entity to try and provide this service is not the way to go. There should be a complete hiring freeze within this organization until the last person left has either retired or passed.

J T
J T

“The [argument against the] PO banking proposal is just a weak attempt by the [right] to try and keep the [banks – actual recipients of government welfare] (and their over-compensated, [golden-parachuted CEOs]) relevant in the 21st century. We should be trying to trim-down the services this over-bloated organization provides, not the other way around. I agree that poor people should have access to banking, however using what is already an archaic entity to try and provide this service is not the way to go. There should be a complete hiring freeze within this organization until the last person left has either retired or passed.”

-Am I doing this right?

Sam
Sam

the government should never bailout the financial sector, any free market capitalist would agree. so it doesnt make too much sense to argue against free markets by citing evidence based on when free markets were not adhered to lol

LlamaOfDoom
LlamaOfDoom

Over-bloated? It doesn’t provide much more than what I consider to be the minimum a national postal service should be providing- the ability to send letters and parcels from any point in the country to another point in the same country or globally, with at least one express option, and the ability to rent mailboxes at the station. It doesn’t provide banking like in other countries’ postal services (like Japan or China) or even a prepaid card account (like Canada and many other countries), it doesn’t provide foreign currency services (like the privatized Post Offices of the UK), and while passport services aren’t normally what’s associated with post offices, does the US really have any other economical way of offering people the ability to get passports no matter where they live?

Sam
Sam

Would be much better to just mail something saying that unions went out of style along with water fountains for people with different skin pigment concentrations. Unions nowadays are only good for killing jobs, bloated union boss compensation, and financially insolvent pension plans… ‘notha day, notha dollah crowd hasnt quite woken up to smell the folgers yet

William
William

Saying “Marriott Free Night Certificates Can Be Upgraded” is a typical scammy clickbait thing, which is almost never used here, and which is why I check this site more often than all competing sites. Please keep your standards high.

86
86

That interest rate cap proposal could potentially change CC rewards programs as much as lending.

Curmudgeon
Curmudgeon

The 15% interest rate limit would also apply to things like payday loans, thus ensuring that the absolute last resort for those with poor credit disappears, leaving them with zero options to borrow money for emergencies, except for the _actual_ loan sharks who operate with no government oversight and will show up and break your thumbs when you don’t pay.

This would also likely eliminate credit cards for anyone with a poor-to-marginal credit score (say less than 720 or so) depriving them of emergency loans and financial resources. Of course, that would cause a huge uproar so the most likely response would be a new government program to provide credit at low rates to those most likely to not pay it back, which the taxpayers will enjoy picking up the cost of those losses.

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