New Democrat Leader Jack Layton made his first official campaign promise Tuesday morning, pledging he would rein in the credit card companies and tackle household debt, if elected.
Layton, speaking in Brantford, Ont., said he would cap credit card interest rates at 5 per cent plus prime.
The initiative would save the average credit card holder $60 per month, or $720 per year.
Layton said an NDP government would also help small businesses by limiting the fees charged for credit card transactions.
"Canadian retailers are forced to pay among the highest credit card transaction fees in the world -- money that comes out (of) their own pocket," Layton said.
"We'll level the playing field to give small businesses a chance to grow."
The Conservatives have brought in a voluntary code of conduct for banks, encouraging them to deal fairly with consumers and small businesses. But Layton said he would make that code mandatory.
He said Canadian charter banks made more than $21 billion last year, and suggested the massive financial institutions don't need taxpayer-funded breaks.
"Under Stephen Harper the large profitable companies have done very, very well. Now it's time for Canadian families and small businesses to get a break," Layton said.
However, credit experts are split on how the policy would affect consumers in the real world.
According to Mel Fruitman, from the Consumers' Association of Canada, creating a credit cap could result in banks freezing out much of the population.
"It would have the negative result of restricting credit for those who would probably need it the most," Fruitman told CTV's Power Play Tuesday.
Fruitman added that lower interest rates could also lead to consumers spending more on credit and creating more debt. In the future, if rates climb, "people are going to find themselves in trouble," he added.
But Anu Bose, from the consumer group Option Consommateurs, said that Canadians deserve to know why credit card interest rates remain high, despite historically low lending rates from the Bank of Canada.
She added that the "great consumer boom is over" and consumer confidence is at an all-time low, meaning that lower credit won't result in frivolous shopping sprees.
"I think we should give consumers more credit than that."
CTV's Richard Madan, travelling with the NDP leader, said Layton has been pushing for bank and credit card reforms for years.
The initiative appears to be targeted at middle-class voters.
Layton's first promise of the campaign occurred in a Conservative held riding, where the NDP has roots going back several decades and hopes to make gains in the May election.
Layton will spend all of Tuesday and Wednesday in southern Ontario, mostly targeting Conservative ridings.
Liberal Leader Michael Ignatieff also made his first promise of the election campaign on Tuesday, promising a Liberal government would provide up to $1,500 per year to students in post-secondary education.
