Let me get this straight: When the credit card bill now snaking its way through Congress becomes law, the banks stand to see a lot of revenue go down the toilet. If they can't charge their most irresponsible customers high fees and interest rates, well then they'll just have to get that money out of the rest of us.
So, if you have a no annual fee card and pay your credit card bill on time and in-full every month, you're going to be punished. That includes possibly being charged interest on every purchase from the moment you buy it.
Imagine what this will do to commerce. Take me, for instance. I will cancel ALL but one of my credit cards, and use that one only when I have to. This means I am likely to do a lot less shopping on-line and purchase few (if any) airline tickets. Talk about a law of unintended consequences. The American consumer may be the backbone of the global economy, but methinks there is going to be a lot less consuming in the not-too-distant future.
(Potential winner here: Paypal. Buy eBay stock.)
But this is hardly surprising. In this economy, the irresponsible wankers get bailed out and the rest of us do the bailing:
- Chrysler and GM take billions from taxpayers. Ford does not. Chrysler and GM go bankrupt, allowing them to restructure their businesses, on the backs of the taxpayers, that give them competitive advantages over Ford. For doing what appears to be the right thing and trying to run its business responsibly, Ford is placed at a disadvantage.
- The banks give $500,000 mortgages to anyone who can fog a mirror. As a "thank you" for living within our means and paying our mortgages, the taxpayers bail out the banks and the guy who refinanced and took money out so he could buy that new Hummer.
- Wall Street backed these loans and AIG insured them. Because we were so smart and Wall Street is so stupid, we get to bail out Wall Street, while our 401Ks lose half their value.
All the while, members of Congress accept huge campaign donations from the banks while claiming to write laws that "protect us."
Maybe it's all for the best. When we end up in a cash-only (or a barter) economy, people will finally be forced to live within their means and that guy will have to sell his Hummer and move back in with his parents. Then, he'll be their problem instead of ours.