Economics editor Chris Farrell
Economics editor Chris Farrell - 
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TESS VIGELAND: So I guess the lesson in all this is that we can't stop analyzing our credit card bills. Be on the lookout for all those new fees and charges. Or maybe, just maybe, it's time to put the plastic away.

Marketplace economics editor Chris Farrell, says that would be the best medicine for the card companies.

Chris Farrell: Call it the "credit card company lament": Thanks to new government regulations the credit card business is less profitable. The new rules are forcing us to raise interest rates, hike fees and cut lines of credit. Taken altogether, they whine, consumers will have less access to credit than before.

Sounds good to me. My hope is that more people will say "no thanks" to borrowing on their credit cards. Fact is, the credit card company business model depends on treating us like suckers.

This came home for me re-reading a book recently about the rise of consumer debt by business columnist Joseph Nocera. In the early 1980s, a pioneering credit card executive bluntly summed up for Nocera the ugly truth of the credit card business: Profits come from finding the people "who get in debt, stay in debt and always pays the minimum balance on time."

Think about that. The credit card business model has long defined its best customers as those who never get out of debt and never default. They just pay and pay and pay. Now, that's a deal -- but only for the banks.

And think about this: The credit card business expanded in the 2000s into the low-income subprime market. The new law requires so-called "fee-harvester" subprime issuers to tell their customers the real cost of borrowing. It's an effective interest rate of 80 percent or more. If you knew you were going to be charged an 80 percent rate, wouldn't you steer clear?

In a strange but true experience, the credit card over the past three decades somehow became almost as much a symbol of the American Dream as buying a car and a home. I say "almost," because most of us are ambivalent about credit cards -- valuing their convenience and dreading the bill.

So, forget all the fancy words about the "democratization of credit" and "freedom of consumer choice." If you use a credit card for convenience, fine. But if you carry a balance, stop. And then it won't matter what the credit companies do.

Vigeland: Economics editor Chris Farrell.

Your thoughts? Go to and click on contact. You can also find a detailed breakdown of all the new rules and regulations soon to govern our plastic.