Free Markets, Free People
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.
Why not just wrap us all up in bubble wrap and bottle feed us?
“We like credit cards — they are valuable vehicles for many people,” said Senator Christopher J. Dodd, Democrat of Connecticut, the chairman of the Senate banking committee and author of the measure now being considered by the Senate. “It’s when these vehicles are being abused by the card issuers at the expense of the consumers that we must step in and change the rules.”
Doug Bandow provides the proper pithy reply to Sen. Dodd:
“Abused by the card issuers.” Of course. The very same card issuers who kidnapped people, forced consumers to apply for cards at gunpoint, and convinced merchants to refuse to accept checks or cash in order to force everyone to pull out “plastic.” The poor helpless consumers who had nothing to do with the fact that they wandered amidst America’s cathedrals of consumption buying wiz-bang electronic goods, furniture, CDs, clothes, and more. The stuff just magically showed up in their homes, with a charge being entered against them against their will. It’s all the card issuers’ fault!
Certainly card issuers are raising their rates arbitrarily to very high rates. And, as I did recently, card holders are calling them up and very politely saying “stuff it – and while you’re at it do it with my canceled card”.
Credit cards aren’t a ‘right’, and the fact that someone gets themselves into trouble with them doesn’t make them a ‘victim’ deserving of special legislation to “right a wrong”.
What in the world ever happened to individual responsibility and accepting the consequences for your actions?