Here’s an interesting Q&A from the Washington Post on Monday on the implications of credit card reform, which passed the Senate today in an overwhelming 90-5 vote – now we know how many bankers are in the Senate – and is headed for conference.
And here’s the Post story on today’s vote.
Now, everyone may be paying a $50 annual fee and 18 percent interest to use a credit card.
Ah, the horror. 
We could chat until Judgment Day about the wisdom of carrying revolving debt and the wisdom of deregulation. What are your thoughts on both?
20 Comments
I know the South Dakota delegation voted against it. Credit Card processing is their bread & butter.
This needed to be done, although it doesn’t affect me, because I never have nor will I ever own and use credit cards.
Yeah, in the short run I’m sure we’ll see several new fees and creative gotchas in the credit card business. Then banks will start to compete again, and fees and rates will start to get more reasonable. Till then, keep your head down…
As long as they can enforce “English-only” (as opposed to gobbledegook) in the documents I think it will be a net plus for consumers.
You are smarter than the rest of the world, ictBest. I’d turn my card in in a nano-second, and it’ll be the first thing paid off when I get that financial opportunity.
Interesting side note: Friend has a revolving balance on a “novelty card,” whose payment cycle was shortened to 21 days in an incomprehensible notice that read like a table of prescription ingredients.
Clearly, the idea there is to keep the due date a moving target to snare the holder in late fees. This is the sort of thing that Congress is stopping, and it’s overdue.
Catch-22 ictBest – you may be getting a poorer credit score by not having cards. So, when you go to buy a house or car you may be unfairly penalized.
Perhaps another area that should be looked at is just how our crazy credit system works.
I haven’t had a credit card for thirty years and am better off because of it. It does make it hard to reserve hotel rooms, rent a car and purchase on the internet.
It is a little bit of a credit issue not to have a card.
Nonetheless, this situation seems like another example of how deregulation, uh, is harmful to the American rank and file.
The have’s once again will pay for the have nots. Going on 4 months of this nonsense and it is the same song and dance.
But hey! Due to the amazing credit card reform you too can carry guns into national parks!
Seems to me, Jerry, that the have’s – the banks – have been paying for their recklessness in the mortgage world, among others, on the backs of the have nots here.
I bought a house just fine without any credit, all I had to do is show them my letters of credit showing them I have always pay my bills early and never late for three years. And I always buy my cars in cash.
Yeah, it took me 6 1/2 years to graduate college, because I was working and going to WSU part-nearly full time, but I graduates without any student loans.
I don’t worship FICO. I can live without it.
It’s comfortable to live debt-free. Although I do have a mortgage, but I’m working on getting that paid off as soon as I can.
I didn’t see any fiscal penalties imposed on the banks. The have’s I am talking about are people like ME. The have not’s are those who are fiscally irresponsible with their credit (homes, cards, cars, etc.).
For Wichita you can count on less individual and business credit and the continued disgusting success of pawn shops and payday loan centers.
What’s next Bill? Those big bad employers who take advantage of their employees by not paying them enough salary to meet the bills they have incurred? Let’s blame them!
There are definitely people who are fiscally irresponsible with their credit cards.
There are definitely people who have massive credit card bills because they’re trying to battle a chronic disease, because they’ve been laid off in an economy poisoned to some degree by greed in the financial sector, etc.
The problem with the banks in this instance, as it exists with the speculators in the oil markets, is unfettered greed. Some of the same people who have their fingerprints on the Wall Street crash are trying to balance their books by tricking “Joe Six Pack,” if I may exhume a tired term.
And from where I sit, that’s just unacceptable corporate behavior.
I think we’ve all learned pretty quickly and pretty harshly that the term “free market” means “give all your money to big business.” The Obama administration doesn’t have a perfect track record, but it and Congress are exactly right to lock the doors to the consumer’s Fort Knox.
No, I think your definition of free market is completely false. To the victor go the spoils. There are no winners in socialism.
Who set the the credit card limits at 34%? Who mandated that 17% of all credit card MUST be issued to those with non worthy credit? Who mandated that if a credit card holder was late on 1 payment that the bank MUST consider that entire debt unattainable in order to pass a stress test?
All of this blah blah blah on greed, blame, soak the rich, etc. No one addresses the elephant in the room. The only elephant that continues to grow and increase its individual’s wealth.
“Who mandated that 17% of all credit card MUST be issued to those with non worthy credit?”
I don’t know that amyone did? I’m sure the claim is that “the government” did but I would sure LOVE to see the government directive that demanded that.
Bill – “trying to battle a chronic disease” – or have to buy expensive medications on Memorial Day weeend because Insurance denied the charge and has nhuman in the office to appeal to. That on top of ER co-pays etc. That can definitely put a crunch in a person’s budget. I’ll see how this all plays out this week.
Quite frankly, if you define socialism as interrupting the unilateral, unapproved flow of consumer cash into the pockets of the wealthy, I find that a very narcissistic economic view.
It’s unfortunate that government has to become involved in protecting consumers from big business. But it seems pretty clear that government got involved in giving big business free run at consumers, so the response to corporate greed – there’s that bugaboo again that destroyed our economy – logically follows.
“Who mandated that 17% of all credit card MUST be issued to those with non worthy credit?”
I don’t know that amyone did? I’m sure the claim is that “the government” did but I would sure LOVE to see the government directive that demanded that.
Bill – have you ever seen the government edict requiring 17% of credit cards going to deadbeats that jerry claims? I notice that he has never responded to my request for the edict.
I’ve checked, and I see no evidence that such an edict exists.
Thanks Bill. It’s sort of like the claim that the government required banks to make all those junk mortgages on McMansions in E-burg etc. You had a story recently about a local bank that had gotten an award for its CRA lending – and it was definitely NOT on the bankrupt list.
Question – based on your overage of the banking fiasco: is the meltdown caused by loans on little $50K bungaloes in Planeview or is it caused by jumbo $500K sub-primes on McMansions?
Regarding the claim I made about the 17% figure:
I went back to the financial advisement firm that stated that and asked for some type of proof that was true. Nothing could be provided. I also researched it myself and found nothing as well.
I apologize for being incorrect and misinformed on that point.
Thanks jerry. What you had gotten was one of those innumerable false claims that are mass-emailed trying to lay blame for the meltdown on “liberal policies” like CRA etc. Unfortunately the facts just don’t support those claims. For example – as I have noted we have seen community banks that are very heavy CRA lenders doing well financially. My own Cap Federal is doing well. The reason: they lend HERE – not California etc. They KNOW their borrowers. They stick to what they know.
This is in many ways a repeat of what happened in the 1980s. The financial institutions that crashed were those who had been high-flying. The “Jimmy Stuart Building & Loans” held steady through that fiasco – and are doing so again today.