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Peter Schiff - Here They Come To Save The Day

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April 24, 2009 – Comments (3)

With much fanfare this week, Congress and the Administration began a series of actions designed to protect over-leveraged consumers from the high fees imposed by credit card lenders. As with most other initiatives devised by government, this policy will create a host of unintended consequences that will undermine the benefit the program hopes to create.

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3 Comments – Post Your Own

#1) On April 24, 2009 at 3:28 PM, bridgeboy0 (30.70) wrote:

Good information!  Thanks for passing it along.

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#2) On April 24, 2009 at 6:47 PM, Alex1963 (28.38) wrote:

Hey K

Good post.

I'm not sure where I stand on this issue overall. But I do have a comment. I guess what does bug me about what the credit card companies are doing is that they have suddenly decided to get religion. They smell blood in the water and figure they can take advantage of cash strpped consumers who they previously were practically giving these cards away to. Had they shown this restraint  years ago it might have helped alleviate the current problem. Americans have had an excess of credit for years now, right? And it was the credit comapanies themselves who rationalized offering more credit to people who may have had multiple lines open where they clearly shouldn't. Now they want to be able to offset the risk they themselves undertook willingly and irresponsibly. If anyone was privy to the hopeless national overreliance on personal unsecured credit it was these very companies. Now it seems that even if someone has a relatively (for these times) reasonable payent record with them they still want to be able to change loans for those they deem "at risk". I'd like to see that definition 1st. Now if they are saying they'll freeze my mine of credit but also freeze the rate at todays level OK that seems more reasonable. But if they are saying they want to unilaterally raise the rates on my current balance, that is bogus. Try pulling that one in the business world against a corporate client with millions on the line.You'd be in court and you'd lose.

I have no credit cards by the way so I have no real personal stake in this move. I'm against objecting for something for what it could lead to as a rule. I believe you can make concessions and take each hurdle one by one. (ie NRA battling every piece of legislation on even mild restrictions for "what it could lead to") But I would be worried about a precedent here. 

I withold my judgment until the final details emerge but this just seems like the same banks double dipping. 1st indirectly thru the bailouts, back stops and Tarp and now directly and at their own discretion straight into the consumers pocket. Who do they think they are? The gov't! 

Alex 

 

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#3) On May 01, 2009 at 5:44 PM, Bojac3728 (< 20) wrote:

I agree with ALEX1963. Great post.

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