NDP Promise to Cap Credit Card Charges

The NDP has made its first campaign pledge of this election: Credit card charges need to be capped. NDP Leader Jack Layton is banking on the idea that middle class families feel they deserve help, and they will respond to a cap on credit card charges that contribute to the difficulty many Canadians have in paying down debt.

Could the NDP Force Others Into Taking a Stronger Stance on Credit Card Fees?

With little chance of forming the government, the NDP is unlikely to ever implement this policy. But with the prospect of another minority government or even a coalition running the country, this could prove to become a hot-button political issue. It should be noted that the Harper government's budget that the NDP votes against to precipitate this election included limits on credit cards, but Layton is proposing to go a step further than what was proposed in Conservative budget.

The NDP seems prepared to go for the throat on the issue of credit card fees. The Winnipeg Free Press reports on the policy announcement from Layton and the NDP:

He says financial institutions shouldn't be able to charge consumers at an interest rate of more than five percentage points above prime.

"Under Stephen Harper, Canadians pay some of the highest credit card fees in the world," Layton said as he kicked off a tour through southern Ontario.

"I say families now deserve a break."

Layton might have a point. While there are low interest credit cards, they are quite difficult to get. Many have annual fees, and few low interest cards have rewards programs. (Rewards cards often have relatively high interest rates.) 0% credit cards, a common fixture in the U.S., are all but absent in Canada. With Canadians turning more and more toward credit cards, perhaps it is worth asking whether or not it is practical to limit interest charges and fees.

Even if the NDP doesn't win a seat at the Cabinet table, the focus on credit card charges -- and their effects on middle class Canadians -- might force whoever does win the election to change things so that the best Canadian credit cards get better.

This post was included in the Anything Goes Carnival of Politics at the Salty Blogger.