Credit cards rates and rules seem to be the issue du jour. The President met with credit card issuers today and said he would push for new laws to protect consumers from lending abuses. Two senators called for an emergency freeze on rates for current balances. Once again, the government is crying fire! after the house has burned down.
Even Canadians are angry:
New Democrat leader Jack Layton said: “Earlier this week, the Bank of Canada lowered its interest rate to yet another all time low.
“Meanwhile, credit interest rates remain at an all time high and banks are targeting vulnerable Canadians. Why during this recession is the government just sitting by while consumers are getting fleeced?”
Did these politicians just realize that consumers are getting fleeced by credit card companies? They seem to be acting like banks were charities before and have just recently decided to focus on making money. No, the truth is that credit card issuers are doing the same thing they’ve always done – taking advantage of the fact that people want to spend money they don’t have. It’s just that until recently, the banks didn’t put the screws to people with “good” credit because they were making plenty of money on people with “bad” credit. It’s still credit.
An emergency freeze now only means those people are stuck with their heinous rates. I can understand the call for outlawing rate increases on current balances and some of these other regulations. But the banks will make good on their promise that less credit will be available, and it’ll be more expensive. You can count on that. And maybe that’s just what the country needs.
If I had a significant balance on a credit card, and the bank just jacked up the rate without cause, I’d be raging too. But I’d have to put some of the blame on myself for getting into that situation with a lender who up front stipulates that rates can change at any time.
There’s a warning label on cigarettes too. Since 1965.
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