“These credit-card companies are beyond the law and should be more tightly regulated.”

Saturday, August 30, 2008
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This story in Business Week is just more of the same: poor me, I went into debt on credit cards because it was so much having having all the goodies, but now I can’t make the interest rates, so government, you gotta do something!

Lured by bank come-ons that sold a debt-fueled lifestyle of lavish vacations, sumptuous restaurant meals, and carefree shopping sprees, consumers piled up unprecedented debt during the credit boom: Consumer credit-card debt has skyrocketed to almost $1 trillion, double what it was in 1996. Unpaid credit-card debt is on the rise, too, up 22% in June from a year earlier, according to reports by the major credit-card issuers, American Express (AXP), Bank of America (BAC), Capital One Financial (COF), JPMorgan Chase (JPM), Citigroup (C), and Discover (DFS). But when the housing bubble popped and the economy slammed on its brakes, suddenly many free-spending consumers were left holding the bag.

The Federal Reserve Board has already proposed the new “fairness” rules. If the banks can’t properly price in risk because of the new rules, you can bet the great deals on credit cards – like 0% interest – will go away for those of us who take advantage of them. And I do. So, again, everyone loses out in regards to more regulation except those irresponsible buying addicts who used and abused the most.

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