Reward the irresponsible while punishing the responsible. It’s the liberal way, apparently.
Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
On a related note, the Senate just passed a bill putting the very restrictions mentioned above on credit card companies.
Your ability to get a good deal on credit is about to get diminished, because as the man just said. You’re about to be subsidizing other people’s credit problems.
This is just another way in which government intervention into free markets has negative connotations. Small business owners. Individuals. These people are going to suffer. Their buying power is going to be diminished. All because the politicians feel the need to buy votes with “look at how nice we are” legislation aimed at people who don’t pay their bills.