Credit Cards and Cashing In

In the news these days is the latest in series of bills which would try to make matters “fair” for everyone who has a credit card. Please understand that I’m not against fairness, per se, but against the government meddling in matters outside of its bailiwick. I see in this bill the hands of people such as Senator Dodd and Senator Representative Frank–who were interested in making everything “fair” for homeowner-wannabes a few years ago, with the current disastrous results.

John at PowerLine has a point:

Historically, it’s been a truism that banks don’t make money on credit card customers who pay off their bills every month. Instead, revenue has been raised disproportionately from the banks’ more feckless customers, in the form of fees, penalties, and–most important, presumably–the high interest rates credit card companies charge on balances. Of course, that is not necessarily unjust, as these same feckless customers cause the most trouble and expense to credit card companies, not to mention the most losses when they can’t pay their bill and default.

South Dakota’s senators are on the unpopular side of this issue, more than likely because of the credit card companies based in this state than because of holding to particular principles.

I think something which tends to get lost is the fact that Congress is dealing with another symptom of a financial problem rather than the root cause: People spending money they don’t have. But then personal responsibility is just that–and not a matter for Congress to handle on my behalf.

5 thoughts on “Credit Cards and Cashing In

  1. I’m with you on this. Though I do think credit card companies have been predatory in going after college students. But the problem is that they are just taking advantage of the bigger problem which is the lack of teaching fiscal responsibility. We’ve changed the way we consume and turned our nation into a nation built upon fostering debt.

    If we could get back to a time where people could purchase without the need of credit we’d be in good shape. Though I don’t know if we ever will. Particularly when you have a government bent upon borrowing and creating money out of thin air.

  2. Couldn’t agree with you more: I’m generally terrified when Congressional members start talking about “fairness.” Fairness isnt in their job description.

  3. Hal,

    I would agree that credit card companies are not without blame for some of their practices–but that this is the wrong way to go about fixing it.

    As far as purchasing without the need for credit, we can go there as individuals even if our society stays hooked on easy credit.


    I wonder if we could send them a bunch of rocks which say “Life isn’t fair.” Nah, wouldn’t do any good.

  4. “Fairness” here isn’t the happy utopian liberal vision of giving everyone flowers and candy: it’s imposing regulation on a venal industry that profits from usury and deception. You could argue that it’s our personal responsibility to make sure our auto mechanics don’t lie to us about the parts they put in our cars, and that if we get cheated by a mechanic, it’s our fault for not more closely inspecting the parts. But that seems an abdication of the proper role of government to ensure that commerce takes place according to rules somewhat fairer than the law of the jungle.

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