If I have any major financial regrets, the top one of the bunch is taking out a credit card. While they have their purpose, the past eight years have been a barrage of pro-financial institution regulations enabling credit card issuers to legally morph into loan sharks: Witness the 8 percent rate hike I endured in November, so the issuer can recoup losses from other card holders.
Hard to believe anyone in this economy can’t handle doubled payments and interest rates rising from the low teens into the 30s, isn’t it?
Well, those loan sharking days appear numbered, as this story about the Federal Reserve illustrates. Anything that makes it harder for banks – many who issued credit cards to consumers without regard to credit suitability – to make money unilaterally by gouging consumers, despite the free run on the U.S. Treasury many have gotten out of the October bailout, will get nothing but applause here.
But never let it be said that I’m unsympathetic to the plight of financial institutions. Maybe they can start hoarding and speculating in oil to recoup their losses.
There’s more than one way to gouge the American consumer.
4 Comments
Many radio programs defend the credit card companies as free market institutions that should be free of government regulation. That a person should just not use their easy credit if they don’t want to pay their rising interest profits.
I think we’ve seen quite vividly how injurious an unregulated free market can be to the common man, Lonny – in a variety of arenas.
And how lucrative it can be to those who are – and I put this as kindly as possible – financially savvy, if not morally savvy.
I have a better idea. Never own a credit card.
Credit cards are almost a necessity in today’s economy. I use mine simple as cash management tools – paying completely each month. The problem here is that the companies are violating their agreements with card-holders much like certain cell phone companies do whan they unilaterally change the terms of service.
I would LOVE to see a team of really good plaintiffs’ lawyers take the companies apart to the tune of a few billion.