The Credit Fix to New Regulations: Pass it on to the Consumer
Most of us know about the new credit card regulations that went into effect recently. When I read what the new regulations were, I was very happy; I had a “long time coming” mentality towards Credit Card companies. Some of these new regulations include things like a greater advanced notice of rate increases, various fee restrictions and so on. Here is a link with more information of the new regulations.
Before I could take a bite of my delicious BLPT with extra pickles, what do you know…the CC companies counter with some new “TERMS” to their cards. Really I’m not surprised at all, these companies have to make money just like any other company, it just annoys me that a seemingly a large portion of their revenue comes by “ripping off” the average consumer. Of course the reason I have this mentality is because of the high average rate of credit cards, the outrageous late fees, promotional items that often actually hurt the consumer more than benefit them (something you would typically think a PROMOTIONAL item is NOT supposed to do), the endless wave of disgruntled credit card owner stories, and so on.
MarketWatch had an article recently about these new “TERMS” that are associated with new cards due to the new regulations. The specifics can be found in the article here.
I don’t want to analyze the whole article, but rather point out one sentence from it:
“Issuers are looking for ways to recoup potential lost revenues from the new regulations,” said Andrew Davidson, senior vice president at Mintel Comperemedia.”
What does that Sentence mean to me? A few things:
- New regulations made certain practices of issuers illegal
- The newly illegal practices were things that consumers typically hated about credit card companies
- These practices that were made illegal generated a decent amount of revenue for issuers
- Without these methods of income, Issuers had to make up for lost income
- Issuers therefore made up new Terms side stepping the new regulations
A contributor made the following comment following the posting of this article: “Save big, use cash or check, simple. Quit supporting the card companies.” –placebo.  Easier said than done placebo, but great point nonetheless.
So while the consumer gets some additional help from Washington on this matter, the CC companies fire right back with new terms. Like I said, I’m not surprised at all. I’m just going to go on eating my delicious BLPT, blog about it, and continue to pay down debt. That’s about the best thing I can do.
March 11, 2010
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myfinancialobjective · 
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Tags: consumer, Credit, regulations · Posted in: Credit
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One Response
Heard this referred to as predatory capitalism. While the regulation provides some protection measures for consumers, CC companies will find new and improved ways to skim profits off the top. This is why consumers must be ever vigilant with their finances.
It’s unfortunate because things like these make me realize I’m only a pawn in a rich man’s chess game.
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