[ETWolverine]

Confirmed, credit card companies are expecting the good customers to subsidize the deadbeats thanks in part to the new credit card "reform" which will limit penalties on risky borrowers. Sounds vaguely like what happened with the housing industry, we're being penalized to help deadbeats pay their mortgages. I guess that's "social justice" for you.

There's a fairly well known Apple advertisement in which a "Bill Gates" type is counting the amount of money he's going to place in advertising vs, how much he's going to place in upgrades to fix the bugs in Vista. The Apple representative asks him if he really thanks that small an amount is really going to solve the problems with Vista? The Gates clone says that the Apple guy is right and moves the entire amount into advertising.

See it here: YouTube - Apple "Get a Mac" ad: Bean Counter

The point is that I see the credit card companies doing the same thing. Instead of fixing the problems by getting rid of the bad credits, thus becoming profitable again, they are instead going to put all their resources into milking the good customers as hard as possible.

See what happens when the government starts messing with stuff they shouldn't? It's the Law of Unintended Consequences.

Elliot

[speechlesstx]

See what happens when the government starts messing with stuff they shouldn't? It's the Law of Unintended Consequences.

I'm not so sure that Obama sees it as unintended. After all, punishing success is a huge part of the liberal agenda. The good customers are apparently not suffering enough.

[ETWolverine]

Speech,

I wasn't going to say that. But I have to say that I don't think any of these consequences are "unintended" on the part of Obama. They are just unintended by the people who voted for him and pushed for government intervention on the issue.

[inthebox]

Confirmed, credit card companies are expecting the good customers to subsidize the deadbeats thanks in part to the new credit card "reform" which will limit penalties on risky borrowers. Sounds vaguely like what happened with the housing industry, we're being penalized to help deadbeats pay their mortgages. I guess that's "social justice" for you.

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

You know what will happen:

- sterling customers will notice this and start paying cash or check or a debit card and will reduce their credit card use. It will be painful but a needed behavioral change.



- those that are already not cognizant of credit card interest rates will not notice and further be badly affected,


- those that use a credit card only for emergencies will also suffer from these changes.













G&P

[tomder55]

I for one will stop using it if I start losing the grace period... which will in turn slow down my spending... across the board consumer spending will further slow down.. not a good receipe for getting the economy moving .

[ETWolverine]

I for one will stop using it if I start losing the grace period ...which will in turn slow down my spending ....across the board consumer spending will further slow down.. not a good receipe for getting the economy moving .

True. The tightening of commercial credit has slowed down the ability of businesses to produce goods and services. If we see a tightening of retail credit, it will slow spending, lowering the demand for the goods and services. The result will be a shrinking economy.

Add to that the increase in inflation that's coming from the government printing more money and the higher cost of fuel, and we're talking about STAGFLATION the likes of which we haven't seen since the Carter Administration.

Obama is batting 1000. He's doing everything EXACTLY WRONG to fix the economy.

-Increased spending
-Increased borrowing
-Bailouts of businesses that should be failing
-Taking control of private businesses and industry
-Increased regulations on industry and private businesses that increase production costs
-Not increasing the use of our home-based fuel resources
-Using necessary food products (corn) to instead produce fuel
-Increased taxation on EVERYTHING
-Tightening of credit markets
-Making sure that inflation increases by printing additional money
-Creating additional government spending via earmarks and pet social projects

A perfect record... Only a messiah can have one of those.