What effect will the new credit card rules have on poor people?
Congress just passed sweeping regulations to protect the consumer (poor folk) against those big bad banks that give us the American past time known as credit cards. Your wonderful government hails the program as protecting the consumer. I say it will kill the poor folk and cause much more harm than good.
Here's how I see it. Your government has just made using a credit card worthless to me. I would never pay a fee for the right to pay on credit, when I can pay cash. I would simply stop using my credit card. People with money in the bank have other ways to gain credit than through a credit card. When I, a great credit candidate stop using credit cards because
- I won't pay a fee
- I have no benefit to using one without a rewards program
The credit card company loses money from the fees they charge merchants from my purchases. When I stop using credit cards because of the benefits it gives me, the credit card companies will be left with a pool of high risk candidates who are at much higher risk of defaulting on their agreement to pay back their cards.
What that will do will
- Cause the people who require credit cards to survive to experience even HIGHER interest rates as banks need to charge higher rates to make up for a declining pool of credit card candidates. With increased risk comes increased rates.
- Find it even harder to get credit card companies to give them credit.
Obameconomics in all its glory, not only protected the consumer from predatory banks, it has created credit which is even more unaffordable and difficult to obtain for the poor folk.
Perhaps that is the magic of Obameconomics. Make credit harder to achieve for the poor, there by increasing reliance on government handouts and increasing the expansion of the democratic socialist movement.
Thereby increasing the taxes on those with good credit, making them harder to achieve their financial independence without credit cards, which they now can't obtain because all the banks have left the business.
Soon, even the rich will be waiting for their government handout as well. And all the credit will be gone. And growth will be dead.
That's exactly the point, though. On the surface, all this seems like really nice things to do for people....credit card restrictions, government funded healthcare, Hope for Homeowners, banking and industry bailouts...A dependent voter is a dependable voter.
ReplyDeleteWhat I don't get is... if things were supposed to change so drastically in Washington, why was gun legislation attached to this bill? Seems like kinda an old school way to do it.
ReplyDeleteBanks hurt themselves with this one. They went to Washington asking for money - well if you ask for money, it comes with stipulations ("strings attached.)
ReplyDeleteBanks played games to - changing due dates, changing interest rates in the middle of the month, changing rules and then mailing out the information on tiny (4 point font) cards.
Banks took a risk - they lent money to high risk customers. They lost money; the new rules are supposed to make it harder for high risk consumers to get credit. They will.
The people who want to improve their credit rating and obtain credite will; the people who want to wait for someone (charity, government, whatever) to save them from themselves will continue to do so.
It's not the end of the world - just more of the same.
People will not stop using credit because Visa and Mastercard make it easy to stop payment when something goes wrong (item never delivered, damgages mercahndise, pruchaser died...). Try that with cash!
As always, the government changes just enough to stay the same.
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