Free Markets, Free People

Pay Your Credit Card On Time and Suffer Anyway

Because the fact you’ve been a responsible adult and paid your credit cards on time and have immaculate credit simply doesn’t matter once Congress gets involved in saving yet another victim class from itself:

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

You begin to wonder, “why bother”? You pay your mortgage on time and end up subsidizing those who don’t. You manage your household finances well and end up paying to bail out institutions which didn’t. You stay on top of your credit cards and pay them off regularly and now you’ll be subsidizing those who don’t.

Responsible conduct is punished and irresponsible conduct is subsidized.

And, of course, when you create a new victim class, it is important to vilify the evil oppressor:

Austan Goolsbee, an economic adviser to President Obama, said that while the credit card industry had the right to make a reasonable profit as long as its contracts were in plain language and rule-breakers were held accountable, its current practices were akin to “a series of carjackings.”

“The card industry is giving the argument that if you didn’t want to be carjacked, why weren’t you locking your doors or taking a different road?” Mr. Goolsbee said.

Amazing. Just simply and utterly amazing.

~McQ

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49 Responses to Pay Your Credit Card On Time and Suffer Anyway

  • After being part of the top 10% of taxpayers, I’m taking the idea of going on the “dole” seriously.

  • Well, I’m not going to be carjacked anymore.  Once I pay off my credit cards (and happily, that won’t be long now) I’ll just cancel them, which will also lead to my spending less money and spending less often.  Ha ha ha, credit card companies!  Your evil days of facilitating consumer spending are about to end!

    You know, the law of unintended consequences could be a real benefit here.  If these moves cause people to slow their spending and begin increasing or rebuilding their savings, this will be great for the country in the long run.  And possibly also in the short term, since it would deepen the recession and lead to a political house-cleaning in 2010 and 2012.  Of course, the benefit would end there, as I suspect that we’d just see a new round of deficit spending based on the idea that you spend your way out of debt.  I guess every silver lining has a cloud.

    • I’ll just cancel them

      Bad idea, just stop using them (unless you are paying a charge to keep them). Stash it away or destroy it.
      Part of your credit score involves the amount of credit available to you, the more available .. the better.

      So things, like insurance, that don’t seem like they should be based on your credit score,  are, in part, based on your credit score.

      • Sorry, I was being a bit facetious in my post.  It just seems so backwards to me, to punish people in a way that may deter spending, when the administration’s stated goal is to encourage spending in order to improve the economy.

        • That would be a bad goal, since overconsumption via debt was a primary cause of this mess.  People mistook “wealth” (stocks and realestate) values for something dependable, borrowed against it, refused to save, and didn’t realize that the “wealth” markets were bubbles propped up by high current account deficits (mostly trade) and high debt (credit card debt went from $200 billion or so in 2002 to almost $900 billion before things fell apart).   More consumption is not the answer — we’ll never get back to the days of 2006, and if we tried it would set up an even worse collapse.  We need to have a sustainable economy, and I’m not sure if Obama is leading us there or not (but at least we’ve broken out of the illusions of the last couple decades).

          • I agree, I was just pointing out the odd thinking of the administration with this example.  I don’t think you can eliminate debt by taking on more debt to deal with runaway spending, which is what our government has been doing for decades.  I’d rather see this administration tell us that rebuilding our savings and lowering debt (as opposed to lowering the deficit on a year-to-year basis) is the way to go, and promoting legislation that rewards it.  Instead, they encourage spending our way out of the recession, but then they institute a policy that I think will discourage spending, at least by those who can afford to spend.  It makes my head spin.

          • More consumption is not the answer

            But Erb DOES support more taxes, so he wants people to have less money. He just wants the government to have the money rather than employers and citizens. Don’t be fooled by Erb.

      • Part of your credit score involves the amount of credit available to you, the more available .. the better.

        Not entirely.  Having access to some credit and having a good track record of payment is very good, but there is a point of diminishing returns.  Having access to too much is a red flag. 

        That said, I agree that I wouldn’t get rid of all of them.  I’d simply be more selective about which I have and how much I use them.  I use Discover now primarily.  If they take away their cashback incentive I lose my primary reason for putting most of my credit card purchases on that card.

        • That’s true, but it’s better to have them cancel you, than to cancel it yourself.

  • Don’t be silly. Cardholders who pay their balances now will simply pay cash if the credit card companies try this. What will actually happen is they will make a little less money from not charging ridiculous fees and interest rates on cardholders who carry a balance, and they will continue to provide perks to those who don’t or face losing them as cardholders, and the world will continue to rotate on its axis. 

    Also, a credit company charging you a fee now because they can’t rip off somebody else isn’t you “subsidizing” those who aren’t getting ripped off. It’s just business. 

    • Would you care to enlighten me on how someone failing to meet their contractual obligation, the same one I meet with the credit card companies I do business with, is a demonstration of the credit card company  “ripping someone off”.

      Are you saying when a customer fails to meet the contract stipulations they agreed to by using the card, and borrowed money, using the card, and then failed to live up to their obligations that they were, what, “ripped off” by the Credit Card company when the Credit Card company invoked the penalties clause written in the contract that both parties agreed to?

      Is that we’re talking about here pre the ‘fix’ Congress will propose to help protect these poor  ‘risky’ borrowers?

  • America is done.  All empires end, period. And yes, we are an empire.

    Only the details of the crash are at question.

    Will you throw a temper tantrum and want to destroy the world when it happens?  “If . . . if <sniff>  WE can’t be #1 <sob> <whine>  NOBODY can!”

  • “Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.”

    Hmmm, I’d just cut credit lines to “risky borrowers” instead. Or will their credit be mandated?

    I do love that Goolsbee, who is supposed to be Obama’s pro-market economist who so impressed everyone that Obama was a centrist is behind this.

    The first time we hear from him is about a regulation of credit cards, and yet another dose of uncertainty for the rules governing the economy.

  • And do you really think you’re going to stash your money in savings, and Congress won’t suddenly see all those ‘idle’ savings as a source of potential revenue? 
    Dream….on…..

  • One must say it time and time again, until it gets through:

    OBAMA HATES CAPITALISM.

    This is why he told Joe the Plumber that he wanted to “spread the wealth.” That is code for Socialists who hate capitalism. Unfortunately, most people who pulled the lever for this thug did not think he was serious.

    Obama must be stopped. Commercials, letters to the editor, something. Raise money for anyone who votes for his ridiculous program of confiscation and redistribution of wealth. If not, he will spend us and socialize us into a hole from which we never, ever recover.

    • I wouldn’t go as far as to say Obama hates capitlism, but it is clear that Obama hates large inequalities.
      This theme repeats over and over again.

      • Obama only hates those inequalities that he cannot control through a nomenklatura.

  • What’s next?  Penalties for paying cell phone bills on time or not exceeding your minutes???  Penalties for not using your health insurance???  Can I claim that my life insurance company is “carjacking” me because, though I’ve been paying premiums for years, I haven’t collected ANYTHING from them (the bandits!)?

    Austan Goolsbee, an economic adviser to President Obama, said that while the credit card industry had the right to make a reasonable profit as long as its contracts were in plain language and rule-breakers were held accountable, its current practices were akin to “a series of carjackings.”

    How nice!  The card companies and banks have a “right” to make a “reasonable” profit!  Isn’t that wonderful!   How generous of Mr. Goolsbee and his boss, The Annointed One!  Imagine: letting people and companies who take a risk by lending money to others actually try to make a little bit of profit for providing the service!
     Did I say “service”?  Silly me!  They are providing a neccessity, because we all know that easy credit is a fundamental human right, like free speech, the right to keep and bear arms, trial by jury, free health care, and free college education.

    / sarc

    I object very strongly to the Goolsbee’s use of the term “carjacking”.  He makes it sound as though the credit card companies are forcing people to take cards, then forcing them not to read the terms of use, and then forcing them to pay late or even not pay at all.  But I’m not surprised that he thinks this way: he’s a lib, so his brain doesn’t really work properly, and in the alternate reality that he inhabits, card companies probably DO send squads of goons around, forcing people to sign up for cards with steep fees and shredding their payments before they drop them in the mailbox.

    Sigh… So long, capitalist economy.  It was fun while it lasted.

    • What’s next for your cell phone: I got this in the mail this morning. Sorry for the screaming font, I couldn’t figure out how to reduce it’s size.

      REMEMBER: Cell Phone Numbers Go Public next month.

      REMINDER…. all cell phone numbers are being released to telemarketing companies and you will start to receive sales calls.

      ……. YOU MAY BE CHARGED FOR THESE CALLS

      To prevent this, call the following number from your cell phone: 888-382-1222.
      It is the National DO NOT CALL list. It will only take a minute of your time. It blocks your number for five (5) years. You must call from the cell phone number you want to have blocked. You cannot call from a different phone number.

      HELP OTHERS BY PASSING THIS ON TO ALL YOUR FRIENDS… It takes about 20 seconds. =

       

      • It’s an urban legend. Yes, you should feel stupid because simply searching Google for the phone number pulled up Snopes as the top hit. Searching for the headline “Cell Phone Numbers Go Public next month” turned up another urban legends site in its second hit.

        Next time you get any email making a claim, even if it’s from your friends, just copy a key phrase into Google or whatever and search for it to see if it’s been debunked years ago. This is especially useful if someone claims you might have a virus; virtually all virus warnings people send over email are hoaxes.

    • I think you left the “secret ballot” off your list.

  • What does this do for the people who pay every month on time and send a little more than required and have had their interest rate raised in the past 6 monthe because the credit card companies WANTED TO BEFORE ANY RULES AGAINST IT WENT INTO LAW.
    Where is the reversal to rates of last October for people who have paid all along.  Without that this new action is TOOTHLESS AS USUAL.

  • Also, a credit company charging you a fee now because they can’t rip off somebody else isn’t you “subsidizing” those who aren’t getting ripped off. It’s just business.

    I bet a lot of contract killers say that, “It’s not personal, it’s just business.”

    We’re going to pay off our remaining balances, and cut up the cards.  We can pay cash, save, or do without.

  • As a long time employee in the financial sector, I must applaud most of the decisions made. 

    The bottom line is that we banks (yes, I said we) have been charging ridiculous interest rates, applying payments in an unfair (and inconsistent manner), supported illogical credit and risk practices, failed to notify customers in a fair and timely manner regarding account changes, and made it impossible for even those customers mindful of their due dates, the ability to pay us back.

    Unfortunately, we also often change the rules in mid-stream so that customers who once had a good card at a decent rate with limited fees and nice perks have been forced to pay an increase in fees/interest and loose the perks (or cancel the card) simply so that we banks could increase our bottom line.

    Those that claim that “capitalism is gone” simply don’t understand that we will find other, FAIRER ways to compete for customers and business.  Actually, we’re already working on it. Capitalism is alive and well.

    The bottom line here is that we’re being forced (by Legislation) what we should have been doing all along — always treating our customer’s fairly and doing the right thing.  Karma.         

  • What about the people who pay their cards on time and have had them for years and then they get either hit with and increase in their interest or they drop their credit limits.  It has happened to me on my cards.  I have one cardthat I have been a customer of this company for over 10 yrs and they took my  limits from $1600.00 to $160.00 and I have never  missed  a payment, never  paid late and always  paid twice the minumum payment and was not carrying a balance at the time they did it.   How fair is that to me.  I was punished for those who do not pay their cards so you are carjacked either way.

  • What about the cards that allowed you a low interest rate to roll over a balance and/or just decided to raise rates for no reason.  My card had a 7.9% rate for anything and has been for years now; with an excellent payment record; despite being unemployeed 2 times now.  In Feb., they sent out a letter that the standard interest rate was going to 19%.  The only way the keep your rate low was to OPT out; basically locking and closing the account until it was paid off.  Best part was I emailed my opt out to them on their secure web site on 02.09.09; to which they did not bother to reply until after the deadline; that you had to call to number listed in letter (only) to opt out. 
    Sounds like I’m subsidizing someone who doesn’t pay their payments.  That is where the card companies need to be hauled in.

  • Would you care to enlighten me on how someone failing to meet their contractual obligation, the same one I meet with the credit card companies I do business with, is a demonstration of the credit card company  “ripping someone off”.

    Spare me the sanctity of contract silliness. Credit card agreements are contracts of adhesion. There’s no negotiation. If you have poor credit you get a certain card. If you have good credit you get a certain card. Or you do without. That you agree to be ripped off by a credit card company, when your only other choice is to do without a card at all, undermines the freedom of choice that underlies the “sanctity” of a contract. 

    Also, it should be noted that at present, lower tier credit card holders subsidize upper tier credit card holders, in that credit card companies make most of their money off of the lower tier customers. This permits them to do things like give perks to their higher class cardholders that the card companies don’t actually make any money off of, and then use those cardholder’s experience for advertising and public relations purposes. So talk of upper tier cardholders now subsidizing the rest, is disingenuous. 

    • From the angle of your last point – agreed, it’s not any different than a bank handing out money to people who don’t really need it a really great rates, and nailing people who really do need the money with higher rates.

      From that point we agree, and I’m not sure we necessarily disagree on the other points, but let me clarify my point of view:
      As the old expression says –  if  they want to dance to the tune they must pay the piper, any other approach is them lying to themselves and or the company they borrow from, and it’s not the Credit Card companies fault if they borrow money through credit card use knowing in advance what the rates are (and what they’ll turn in to if they miss payments), what the payment mechanisms are, and what the penalties for failure to pay, or paying late, are.   If they don’t UNDERSTAND the agreement, they shouldn’t be using the card.  This calls for a unique thing called personal responsibility, regardless of how the Credit Card company is actually being nice to their favored customers. 
      When they hand out the agreements, they don’t make special notes in them that say if the credit card company likes them they’ll give them a deal at the expense of other card holders.  They put down, in writing, what their deal is, and they don’t say F-all about what deal anyone else might be getting.

      I’ve got a bunch of these things, over the years I’ve missed payments and paid the price, and I’ve made payments on time and gotten the benefits.  I have a hard time feeling sorry for people who took the money from the Card companies, and somehow think they should be exempted from paying it back when I’ve always paid back every cent I ever borrowed plus the interest, per the agreement I made with the people giving me the card.

      • This calls for a unique thing called personal responsibility,…

        With the proliferation of seat belt laws, helmet laws, anti-smoking laws, corporate and subprime mortgage bailouts, anti-fast food and anti-junk food crusades, and now Congressional limiting of penalties to higher-risk cardholders, one could be forgiven for thinking that personal responsibility no longer exists.

    • “Contract of adhesion”, my foot!

      1.  Nobody must have a credit card.  Yes, they are quite handy, but one can get by in life without them.  Therefore, there is no coercive pressure to accept any terms for getting one; a consumer can either shop around for the best deal or choose not to have one at all.  The “take it or leave it” decision is really the consumer’s, as in “you can take my business or leave it”.  I think we’ve all torn up many, many credit card offers; nobody made us fill them out and send them in, did they?

      2.  The type of card one can get is influenced in large degree by one’s own actions.  By paying on time, keeping a low balance, and generally demonstrating responsibility and trustworthiness, one has a higher credit score and can get better credit terms.  On the other hand, by making many late payments, racking up lots of late fees, carrying large balances over time, defaulting, and generally demonstrating a lack of responsibility and trustworthiness, one gets stuck with whatever card he can get.

      3.  Casting the credit card companies as villains and forcing them to limit their interest rates, fees, and other businesses actually does destroy the sanctity of contract: why should anyone engage in business (such as loaning money, which is the root purpose of a credit card) when his contract can be changed or abrogated willy-nilly by Uncle Sugar AND he gets made out as a villain into the bargain?  Business depends on reliability – sanctity – of contracts, of knowing that if one side upholds its side of the agreement, the other side(s) will uphold their side under penalty of law.  We’re seeing reliability of contracts quickly degraded to meet political goals and serve politically favored groups.

      4.  “… lower tier credit card holders subsidize upper tier credit card holders.”  So what?  People who pay health insurance premiums but seldom go to the doctor subsidize other insurance holders who are frequently sick or injured.  People who pay taxes subsidize those who don’t.  People (like me) who don’t have kids get to pay for public schools that I don’t use.  People who pay their mortgages and other debts subsidize deadbeats who default.  Life is so unfair.  Waaah, waaah, waaah.

      5.  By your logic, what sort of loan or other contract ISN’T a “contract of adhesion”?  Home loan?  Car loan?  How about getting a house painted?  Or a transmission repaired?  All of these things can be thought of as a “take it or leave it” proposition that “undermines the freedom of choice that underlies the ‘sanctity’ of a contract.”  Indeed, there’s a lot less freedom of choice if I need to hire a plumber to fix a busted pipe than there is if I want I credit card; unless I want to swim to bed, I’ve got to get that pipe fixed and I don’t have much room at all to quibble over the price.

      Or shall Congress next put federal limits on how much a plumber can charge because “it’s not fair” that he charges rich people the same hourly fee as a poor customer, but the poor customer can’t afford as easily to pay?

      Finally, let’s think about why those poor, poor people “subsidize” those of us in the “upper tier”, or why we get “subsidized” in the first place: the banks, in order to get our business, have to offer us something to entice us to use their cards.  And why?  Because we pay on time and in full, i.e. we are good customers.  Or, at least, that’s how we think of ourselves.  But, apparently, we’re bandits who’ve been (indirectly) stealing from the poor to get our frequent flier miles or hotel points or cash back.  The world is turned upside down: behaving responsibly is now a punishable offense, while irresponsible behavior is excused and even subsidized.

      How did we get into such a situation?

  • Xanthippas, I’d be interested to see your evidence that the card companies make the bulk of their profit from the lower tier cardmembers.  It sounds suspiciously like standard leftist cant.

    • While I, too, would like to see the evidence, the idea that card companies make most of their money from “lower tier” members makes sense.  Who gets “good” cards, those with low interest rates, low fees, and other perks?  People with good credit.  How do people get good credit?  By paying their bills on time (and thus not paying late fees) and keeping low or no balances (and thus not paying interest).

      In contrast, people with bad credit often get that way because they have many late payments (and pile up the associated fees) and keep large balances, which means lots of interest payments.  Let me hasten to say here that people can get bad credit through no fault of their own: I was unemployed for a while and piled up quite a tidy balance on my Visa, which took me a long time to pay off (the bank must have LOVED me!).

      So, yeah, I can believe that the system is heavily funded by the low-end people.

      • The lower tier may pay higher interest rates, but we also know they have a much smaller volume of transactions (less transaction fees to be collected from merchants, less principle to charge interest on) and a much higher rate of default.

  • “Responsible conduct is punished and irresponsible conduct is subsidized.”

    In other words, the nanny state’s continuing efforts to breed a nation of dependent children.

  • Did any of you actually read or endeavor to understand what this legislation says?

  • Phil said: “Xanthippas, I’d be interested to see your evidence that the card companies make the bulk of their profit from the lower tier cardmembers.  It sounds suspiciously like standard leftist cant.”
    Phil, I tend to agree with you.  Many of the lower tier cardmembers not only miss or have late payments but they entirely default on their debt.  I would think that seriously affects the bulk of profits.

  • I never carry a balance. I use cards for convenience and record-keeping. None of my cards charges an annual fee.

  • Lame! Credit scores, direct control of your behavior by the Government. Think of the little stick on stars your grade school teacher gave you for good behavior. F**k these a*s holes.

  • I am sorry but it is difficult enough to refute the lies  and misquotes of the left but when I see this article on the right wing blogs it is disheartening.

    I have gone through the premise of this bill passed today by the senate and NO WHERE does it limit penalties of those that default on their obligations at all. NO WHERE does it penalize anyone that pays their payments and give any redemption to those that do not or a free ride of any kind nor does it give low income individuals a right to a credit card.
    In fact it makes it more difficult for college kids and those under 21 yrs to get a card without proof of ability to pay it back.

    I spent the day today with my wife calling credit card companies to try and get our interest rates and payments lowered to help us through a tough time and most were willing to work with us with one exception Chase refused to work with us and told us point blank they would rather us bankrupt than lower interest and/or payments.
    Just so you know we have paid our bills on time and never missed any payments and to reward us for our good record of payment and meeting our obligations the credit card companies have over the last two years raised our interest rates to over double and even triple in some cases and lower our limits to our current balance which as anyone knows drastically lowers your credit score in my case over 100 points in a couple of months last year.
    And that is what this bill covered predominately in that they did not do it based on my record with them but they saw a couple of balances rose on a couple of accounts we use for business and decided we were becoming a risk. Without warning our interests went up and even worse our limts were dropped screwing our credit scores we worked very hard to bring to a 750 plus level.

    This bill has nothing to do with penalizing those that pay their bill on time and the talk of doing away with reward programs and bringing back annual limits is strictly a scare tactic of the banks to try and thwart this bill.

    This is the truth and the article is a mindless rant without factual basis. I am a hardcore conservative and believe very much in free market capitalism and free enterprise and trust me when I am behind a bill from the likes of Chris Dodd and back by Obama who is a marxist and hardcore socialist then you know it must be something decent….

    my advice is pay off your cards if you can and pay by cash. We are small business owners and unfortunately have had to rely on our credit to run our businesses…..

    Let’s get the facts straight and not be like the mindless drones of the left that don’t base their arguments on facts but on pure ideology and partisan hatred….

    • I took your excellent advice and looked up the bill.  After about five minutes of reading, I lost consciousness; who WRITES these things, anyway???

      http://thomas.loc.gov/cgi-bin/query/D?c111:5:./temp/~c111tLzmWz::

      However, you have a good point: there is nothing in the legislation itself that seems to penalize people who pay on time or does away with rewards programs and other perks.  However, it has been widely reported by MiniTru (including the NYT article cited by McQ) that the banks will probably respond to this legislation by doing those things; file it under “law of unintended consequences”.  Bloomberg reports:

      Banks will be prevented under the legislation from pricing for risk, Edward Yingling, president and chief executive officer of the American Bankers Association, said in a statement.
      “What has been a short-term revolving unsecured loan will now become a medium-term unsecured loan, which is significantly more risky,” Yingling said. “It is a fundamental rule of lending that an increase in risk means that less credit will be available and that the credit that is available will often have a higher interest rate.”

      And here’s the real problem:

      Credit-card companies are reeling from record default rates. Charge-offs, which are loans the banks don’t expect to be repaid, were 9.01 percent on average in April compared with 5.24 percent a year earlier, a 72 percent jump, according to data compiled by Bloomberg.
      Available consumer credit contracted by a record $11.1 billion in March, according to a May 7 Federal Reserve report. The drop was equivalent to a 5.2 percent annual rate, the biggest since 1990.
      Credit-card industry analysts have said companies’ average losses on bad loans may exceed 10 percent this year, setting a record. Advanta Corp., a Spring House, Pennsylvania-based lender that issued credit cards to small businesses, said on May 11 that it will shut down all of its card accounts because of losses.

      The card companies cannot stay in business if they continue to take losses like that.  Where will the get the money to make them up?  There’s only one place they CAN get them from: their continuing customers.

      The WaPo had this in a Q&A session:

      Credit card executives have warned that they will lose more money if these rules go into effect. They say that would force them to increase interest rates or withhold credit. Proponents of credit card reform say that is just a scare tactic. But many experts do believe that credit card companies will end up scaling back rewards progams and charging annual fees. Before deregulation of the credit card industry back in the 1980s, card companies charged everyone 18 percent interest and annual fees. We could end up going back to that type of model. Already, we’ve seen many card companies cancel rewards programs.

      We’ll see how it goes, but thank you again for the reminder to go to the source about these things.

  • The credit card companies make money on every purchase (which is why some places refuse to take them).   I pay my balances off every month, or, if I decide to carry a balance for some big purchase, I use a zero interest or very low interest credit card.  Over the years any balances I’ve carried have probably averaged an interest rate less than 2%.   Those days are probably over, but perhaps my ability to get really, really cheap credit was subsidized by those who pay enormous rates — those who can’t afford it.  That doesn’t seem fair, so even though the change is a disadvantage to me, I welcome it.

    • Erb:Those days are probably over, but perhaps my ability to get really, really cheap credit was subsidized by those who pay enormous rates — those who can’t afford it. That doesn’t seem fair…

      Forcing people who are responsible to lose out, through no fault of their own, in order to subsidize foolish people is what is not fair. Logic is not one of your strong suits.
      Logically, “those who can’t afford it” should not credit cards in the first place! Once again, you’re pushing for exactly the sort of behavior which touched off this recession: giving credit to bad risks. As you wrote in those comments, “Defending the status quo approach seems insane, it is a PROVEN cause of economic disaster!” And yet, you’re once again pushing insanity.
      The parallel between sub-prime mortgages and sub-prime credit cards is obvious. The answer isn’t to give people with poor financial restraint more incentive to dig themselves into a hole.

      …so even though the change is a disadvantage to me, I welcome it.

      In a free society, you could choose to help the disadvantaged yourself, rather than forcing others who are responsible to help out deadbeats. But you’re obviously against freedom of choice. You want the central planners to deny the private sector freedom, to squash natural incentives, and to continue to push “a PROVEN cause of economic disaster.”

  • That doesn’t seem fair

    Erb’s definition of unfair: Those who fulfill their contractual obligations are treated differently than those who have not fulfilled the contract into which they have entered voluntarily. In Erb’s world, those who are responsible spenders should not be treated differently than those who are financially irresponsible. Erb opposes the idea for private businesses to offer incentives for people to be responsible. Erb supports the idea that government should provide incentives for people to be more irresponsible. Erb is again shown to be anti-liberty. Erb is sh!t.

  • I thought for sure Xanthippas would have come back by now.  Guess he didn’t have any evidence, after all.

  • Sh!t makes good fertilizer, thus being useful.  Erb aspires to be sh!t.

  • I don’t see the merit in combating this bill which is meant to help the middle class get a leg up by charging those who pay on time.  I still think the bill should go through because it is about time for some empathy instead of helping the rich get richer and coddling to them when they whine, but it isn’t time to start unfair practices either.  The credit card companies don’t need to make up for the revenue they’ll lose by lowering interest rates and fees, but they are so used to getting extreme amounts of interest from delinquent payments that it probably feels like an entitlement. 
    http://www.newsy.com/videos/congress_amends_credit

    • You don’t see the merit in respecting freedom of choice.   Since some rich people use credit cards for convenience, you ignorantly assume that everyone who pays it off each month is rich.  Actually, people of modest incomes who understand the dangers of credit card debt choose not to buy things if they calculate that they won’t be able to pay off the balance in the next month.  Such behavior should be in line with global warming Chicken Littles (who berate us for consuming too much) or anti-capitalists (who berate us for consuming too much).  Like any red-blooded Marxist, you’re willing to crack a few eggs to make sure that you hurt anyone you perceive to be rich, even if you’re punishing people who try to live by your masters’ advice (rather than conspicuously consuming like Streisand, Gore, et al.).

      It’s easy for you to decide that a company doesn’t need to “make up for the revenue” that the latest socialist regulation skims from their profits.  (Think this is bad, just wait until the new CAFE standards and their counterparts in the utilities arena start smashing the economy to hell.)  You’re not responsible for paying for thousands of employees, IT infrastructure, office space, various operating expenses, and taxes.  Maybe you think that taking away profits will only hurt the top executives, but history shows such meddling hits the lowest paid employees the worst, not to mention the customers.

      The fact is, when two parties engage in a mutual, consensual exchange (like a customer and business), <em>both</em> parties benefit.  If you don’t feel like you’re going to benefit from using a credit card on the current terms, <b>DO NOT USE THE CREDIT CARD</b>.  Get your scissors, cut up all your cards, and pay cash.  Just butt out of everyone else’s business.

      If you still have the blood lust in your heart to stick it to the rich, no matter how much it hurts the rest of us, then feel free to move to Cuba or North Korea.

  • I’m old enough to remember the days when the only cards the DIDN’T have an annual fee were gas cards.

    You know why nobody charges fees today? The credit card companies didn’t all get together one day and decided to be nice to their customers, they were forced into it by competition. I have no doubt that fee-charging will, if it ever actually does get implemented, not last long for the same reason.

    The ease with which the ‘net makes finding out which companies charge and which don’t will assure this.