“We ain’t got to pay no more bills!”
October 31, 2009
On May 19, regarding Obama’s plan to make owning credit cards easier for deadbeats, I wrote this.
Have you maintained an affordable balance on your credit card and paid it off in full each month? Good for you. You will now lose the resulting benefits in order to pay for the deadbeats who didn’t.
Obama’s plan for you to subsidize credit card deadbeats has come to pass.
Have you checked the interest rates on your credit cards lately? Odds are they’re going way up.
That’s because credit-card companies are rushing to raise rates and tack on extra fees ahead of a law slated to take effect Feb. 22 that is supposed to limit such moves in the future. In some cases, rates are doubling to as high as 30 percent or more, even for people who pay their bills on time.
The current maneuvering by the card companies is serving up another blow to American consumers who are already struggling with their finances. U.S. lawmakers let that happen by giving the card companies nine months to prepare for the rules.
They will be locking in all sorts of draconian rules to help pay for the losses they will incur so that deadbeats can buy things and not pay for them. It is just one of the hundreds of ways Obama is taking money out of your pocket and redistributing it to his core constituency. This redistribution scheme is especially clever, however. In this case, most consumers will blame the credit card companies rather than the governmental regulators who forced them to raise rates to pay for losses forced on them.
James :
Date: October 31, 2009
What right do lawmakers have dictating terms of private contracts between companies and individuals?
Ken :
Date: October 31, 2009
In a socialist/dictatorial/tyrannical country, they would have every right, James. Thank God that would never happen in America.
Oh, wait… s***.
BaconNeggs :
Date: October 31, 2009
Sorry RD this is where I have to disagree with you and those who believe that the “Free Market” must operate totally without any regulation whatsoever.
In the same way we dont get to jump in our cars and drive without traffic rules and regualtions, the Finacial Industry likewise need to be regulated to protect consumers from its unbridled greed and blatant gouging.
That Bush, Obama and Socailist European Politicians gave hundreds of Billions to the Banks of their Taxpayers money, handsomely rewarding stupidity and reckless loan practices, should be of far larger concern than the insignificant amounts Banks may lose by Governement regulation that prevents them arbitarily gouging customers with outrageous intrest fees.
Its a fact of life that most people need loans, mortages etc, to function in the real world, and whether its Obama or anyone else attempting to regualate Intrest Fees of Banks and Loan companies, its long overdue.
R.D. Walker :
Date: October 31, 2009
B&E: I am a strong believer in the Austrian School of Economics and a follower of Friedrich Hayek. Hayek didn’t argue for a complete lack of control of economic matters, but he did argue for a limited role. The economy requires some regulation, especially in the protection of private property, the enforcement of contracts, providing certain public goods and general regulation of the money supply. It should also supply a very minimal safety net.
I have been a customer of the same credit card for 20 years. I am seeing draconian measures this year that I have never seen before. Many are talking about a fee for paying off the balance every month. Most are talking about the return of annual fees that have been a thing of the past for 15 years.
This is money out of my pocket dude. This is money they have to charge to make up for the revenue that Obama is taking out of their pockets with his new rules. Where is the money going? Straight into the pockets of people who don’t pay on time or don’t pay at all. It is going straight in the pockets of people who carry huge balances.
This is taking money from people like me who have managed their financial affairs properly and directly transferring it to those who have not. Taking money from the fiscally responsible and transferring it to people who buy things they don’t want to pay for is not a legitimate, constitutional role of government but that is EXACTLY what is going on here.
Shawn :
Date: October 31, 2009
B&E: I’m a victim of identity theft (it started while I was in the military 15+ years ago). It took me until only 3 years ago to even *get* a credit card, even though I personally ALWAYS pay all my bills on time and have never had any form of collection on me personally. I’m still unable to open a bank account, thanks to this b*tch in southern california (and not a single gov’t agency will do a damn thing about it, even though I have a crapload of information about her).
Now, just this month I received notice that even though I pay all my bills every single month and only carry a balance on one card (and only do that because it’s supposed to HELP my credit), my APR is jumping over 15% on one card and 12% on another.
These policies have DIRECTLY affected me on te bottom line, and ultimately will cost me hundreds if not thousands of dollars more every single year.
Like RD, I’m a believer in necessary government controls – NOT government bailouts or intervention where none is necessary. Whenever government interferes with a free market, it forces that economy to decrease in value and have to raise rates or lower quality in order to meet government demands. This is no different.
BaconNeggs :
Date: November 1, 2009
RD and Shawn thanks for your comments, I agree that in an ideal world we should let the market decide, however, can we truly say that that is always the case these days?
A classic example would be Oil prices which is supposed to be based on supply and demand. Yet despite a major recession and significant decreases in demand added to huge decade high stock piles of Oil, prices are deliberately being kept artifically high by Speculators manipulating the “Free Market”.
The Banks and Loan companies likewise are getting their money from Central bank at less than 1% intrest yet are gouging customers loan shark style with 15 or 20% intrest in some extreme yet perfectly legal cases.
Sure the consumer can vote with their feet but like Oil, Banking or Insurance the price has been “fixed within a tight band” and there is no real competition and therefore choice.
The idea that the “free market” does a good job self regulating is not always true based on the reality of virtually no real competition between them and where they operate as a kind of unofficial monopoly.
I dont agree with “no fault insurance” where both parties pay even if one is clearly at fault, and nor do I agree that your bank should hike your Intrest rates, and gouge you so as to offset loses incurred by others.
Short of Obama style regualtion, perhaps there is some suggestion you can make on how to control arbitary Intrest rate rises or do we continue to leave it to the “Free Market” to continue gouging customers?.
Notamobster :
Date: November 1, 2009
If you were to eliminate fractional reserve banking and privately owned central banks, many of these problems would vanish! Conventiently, Article II, Section VIII of the U.S. Constitution already thought of that for us! As with most problems in this country, they could be solved with a return to sound money, and strong contitutional enforcement!
James :
Date: November 1, 2009
B&E, you really think “speculators” control the price of oil?
Banks can lose money on people who default on their cards. Their job is managing risk while supplying credit. You will find most monopolies can’t exist without governmental preferential treatment of some incumbent party in order to maintain an unnatural advantage against competition.
Shawn :
Date: November 2, 2009
I have to agree with Nota and James.
The artificial economy (sponsored by our increasingly fascist government) is the root of the problem, and the perception of speculator controls is encouraged through the current system, which is the only “authority” capable of imposing barriers to true competition – such as forbidding drilling in Alaska, importing from other regions or US Government-investment in third-world countries using Tax-payer dollars without any hope of recouping the investment for the betterment of Americans.
Porkulus, for example, investest hundreds of millions into oil exploration and alternative fuel research – IN OTHER COUNTRIES! Then you’ve got Haliburton making billions off of foreign wars “fixing” their oil distribution system at a huge cost to us, but curiously these countries are now charging us *more* for oil than before our nations investment.
We don’t have true competition here. And with the government imposing rules on us that other nations don’t have to follow (cap and trade, anyone?), the situation will only get worse.