Wednesday, May 20, 2009

The Dems and your credit card

Congress wrapped up the legislation Wednesday on new credit card standards and sent it to President Obama, who is expected to sign it on Friday. The new rules are to protect consumers from rate increases and over limit fees. Sounds wonderful.

Generally the only way you get an increase in the interest rate is by not paying your bill on time. Usually over limit fees happen when only the minimum has been paid and you continue to use the card past it's allowable limit. The banks now will have to take on more risk as they can't charge the slow pays or no pays more than they do everyone who pays on time.

So how will they cover their increased costs? By charging the account holder who is doing everything right. Proposals range from monthly fees to no more airline miles to interest accruing from the date of the transaction (no grace period).

Who needs credit cards more? Those who are cash strapped. So who will be hurt the most by these proposals? The people the Dems love to say they are for, the poor. People with cash will just quit using the cards or be very selective of when they do. The poor need them to buy groceries and gas. If fewer people use the cards then the CC companies will lay off people. Do you think these will be executive positions or entry level? The people who cannot afford to lose their job will be the ones to go first.

Once again the Dems talk like they care but their actions show how short sighted they are. While making big business pay they are hurting the constituents they claim to care about.

3 comments:

  1. In the seventies you could purchase a house if you wanted. The home mortage rate was 18%.

    Insurance companies will pull restrict who gets credit cards and those that do will be paying higher interest.

    Then the people who can't get credit cards will be crying to the government about it. Obama will issue them government credit cards at a lower rate that what everyone else who has standard credit cards is paying.

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  2. So much for my airline miles. Glad that everyone who misuses a CC gets the benefits. Doesn't surprise me at all though. It's like the bumper stickers on my truck say..."Honk if I'm paying your mortgage," and "Obama: because everyone else deserves what you've worked hard for." It's like when my wife was in undergrad at an all female college. The single women who had kids had free daycare, free rooms, free parking up front, and reduced tuition. The people who do things the right way are always left in the dust.

    Guess it's back to using the old debit card. Think they'll start offering airline miles?

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  3. I finally have enough miles for a free trip to anywhere in the lower 48 states. maybe I should use them before they take them away.

    Maybe the grouchy old woman and I should fly down and see those two lovely babies.

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