Nicole Lapin

Higher credit score, lower APR.

Lower credit score, higher APR.

It's basically a seesaw.

That is not a moral judgment.

That is just how unsecured lending works.

With secured lending, creditors can take your collateral if you don't pay, like your home in the case of a mortgage or your car in the case of a car loan.

So if you cap the rate at 10%, lenders lose the ability to price for risk.

And when lenders can't price for risk,

Stop lending to risk, period.

Meaning the real question isn't when will my APR drop?

The real question is who the heck is still gonna get approved?

Because if you've got a pristine credit report, you probably are still gonna get credit.

If you don't though, you might not get a cheaper rate on the card.

You might not get the card at all.

And when people get shut out of mainstream credit,

They don't stop needing money.

They just get pushed into worse options.

Payday loans, title loans, cash advances, the stuff with triple digit interest rates that make credit card APRs look lovely.

We have to be honest about this trade off.

A cap might reduce interest for some borrowers, but it can also reduce access for many others.