Comments on: Unintended Consequences: Credit Card Edition

By: ChrisWWW

ChrisWWW — Wed, 20 May 2009 17:27:45 +0000

So people who can handle credit cards will be punished, people who can't rewarded.

No.

People who can handle credit cards will stop being subsidized by people who can't. Those 20% interest rates helped pay for your Rewards Points and free accounts. But since those people wont have credit cards anymore (a punishment in a way), the credit card companies will have cut back on rewards or accept less profits.

By: Rebuild Credit Credit Card | Personal Finance Blog

Rebuild Credit Credit Card | Personal Finance Blog — Wed, 20 May 2009 14:41:29 +0000

[...] Unintended Consequences: Credit Card Edition | The Moderate Voice [...]

By: tidbits

tidbits — Tue, 19 May 2009 21:14:17 +0000

A very populist 90 – 5 passage in the Senate earlier today.

By: mikkel

mikkel — Tue, 19 May 2009 19:07:34 +0000

Yeah I thought about mentioning the “wave” you could see in the home equity loans moving into credit cards and the accompanying defaults but I left it out because I think most of those people are doomed either way.

By: tidbits

tidbits — Tue, 19 May 2009 18:09:00 +0000

Mikkel – Agreed, net neutral short term with very marginal long term benefits. There is more posturing than substance here. Market trends will be more determinative than this legislation.

One other accelerating factor, not mentioned, is the absence of home equity loans to counter balance, or pay down/off, credit card debt, resulting in additional default and further winnowing of the marginal borrowers in the credit card market.

By: Dr_J

Dr_J — Tue, 19 May 2009 17:55:59 +0000

So people who can handle credit cards will be punished, people who can't rewarded.

Is there no hope of teaching our citizens the multiplication skills needed to understand interest rates?