To the Editor: As I read about how high interest rates and credit card debt are hurting people in our state, I think of the rising interest rates on many credit cards, even though most people who aren't in the 1% rely on credit cards to help them live a better life. I don't understand how our government allows this to happen. I remember when credit card interest rates were 6% to 10% and were tax deductible. Some government somewhere decided to punish credit card use by allowing credit card companies to charge whatever they want in usurious interest rates.
I have repeatedly asked my state senators and representatives about legislation to regulate interest rates so that people who use credit cards aren't penalized. I don't get a good answer and no one seems to care. This is what is making people poor. We need to demand credit card reform.
Linda Bradshaw Carpenter, Los Angeles
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To the Editor: We applaud the state of California for adding financial literacy to the state's high school graduation requirements. But it's hard to ignore the irony of pairing that story with a story headlined “High Interest Rates Hit Californians Further.” The reporter highlighted some alarming statistics about rising credit card balances, defaults, and the impact high interest rates are having on the state's housing crisis — all legitimate concerns.
High interest rates are a financial burden for those in debt or looking to take out a loan. At the same time, they are a boon to savers. Today, you can walk into almost any bank or credit union in Southern California and invest in a certificate of deposit or high-yield savings account, earning 2.5% to 5% interest, guaranteed by the government. The last time you had that opportunity was under President George W. Bush.
Yet there seems to be an assumption throughout the article that debt is inevitable to reach one's goals – what message does that send to kids? I wish the reporter had explored alternatives to avoid racking up debt, like buying used instead of new, or using cash to avoid racking up credit card debt. The best financial education we can give our young people is the daily example of living within one's means.
Stephen Fershun-Dneff, Claremont