Should we thank regulators for the new rules banning "unfair" credit card practices?

You have a very good point.

However, when they do start limiting credit to riskier borrowers- then there will be another fair movement to make them extend credit to them. (Do you see a circle of problems)

We all should get over the fairness factor and remember what our mommas said Life is not Fair.

I agree with both your argument and its conclusion. However, an extra consideration may help its presentation to anyone who is skeptical. These new regulations are hardly the first government interventions to impact the situation.

Heavy regulations have long been dictated to companies that issue credit cards. One may imply from your arguments that the government is meddling in a previously free market [1]. Nothing could be further from the truth. It is difficult to ascertain what unintended consequences followed the prior interventions. Perhaps the abuses targeted by the new regulations were actually caused by the old ones.

Some might hope that, while the prior regulations were flawed, that the feds will have finally gotten it right this time. This is a naive view. We have seen some companies become dominant in the market. While dominance can and does occur in free markets, with so much intervention it is not so in banking and finance. If you question this, just look at the list of companies deemed "too big to fail" that received bail out money.

At a basic level, regulation seems like a good idea. There are snake oil salesmen ready to peddle their fraudulent wares on unsuspecting consumers. Surely, we need someone to protect us from them. But then we create government regulatory monopolies. Does it surprise anyone when the snake oil salesmen become regulators???

The result is heavy regulation on most people with no real limits placed upon people who gain the favor of the snake oil salesman-turned-regulator. The privileged credit card companies have nothing to fear from these new regulations. These measures are a sham to con the gullible public into believing that the regulators are "doing something". As you say, they may have unintended consequences [2]. Never fear. When those consequences arise, regulators will jump into action to save these businesses so critical to our way of life.

As I wrote at the start, my conclusion is the same, I believe, as your's. These regulations will result in unintended consequences that most of us will regret. To the proponents of regulation, I ask if you really insist upon regulatory monopolies. I could go on and on about my ideas for acceptable solutions. I will stop here though in the hopes that I have given an idea of the complexity of the problem to the reader patient enough to read through this.

From my name, I'm normally in favor of letting the free market rule. But credit card companies actions have been unethical and the free market has not curtailed those unethical actions. They have years to clean up their act, and haven't.

It's high time for the gov't to come in with these regulations. For instance, it is not OK in my book that you charged $5,000 on your card when the interest rate was 12.1%, and then the issuer cranks up the rate to 29.9% and you have to pay that rate on the amount you already have on balance. It's like retroactively resetting a loan rate and should be prohibited.

Another one I find necessary is giving a reasonable amount of time to pay the amount. Ever notice that you used to have roughly a month to pay, and now it's more like 3 weeks. And some cards are even less. The regulations state you should have at least 3 weeks to pay.

Lastly, say you have a balance with a low introductory rate or special they ran, and a normal higher interest balance too. Any principal you send in only gets applied to the lowest interest rate portion and nothing to the highest rate portion. Is this part screaming for regulation? Probably not. But it wouldn't be in the mix if they applied an appropriate percentage to both the high and the low interest rate portions.

Do you not see the flaw in your argument? This is that risky borrowers by definition are not credit worthy. This is not to say that they will not pay their debts. Merely that if they are in a risky category there is a reason why. The credit card companies have some very predatory lending practices and while I am not a big fan of extreme regulation, I do believe it is necessary when certain entities cannot be trusted to act in a fair and equitable manner. A private lender acting in the manner common for the credit card companies would be charged with usury.

I have worked with many banks that charge ATM fees. I was told at one point in time that the cost to process a ATM fee back about 5 years ago was less than 25 cents. Some ATM's charge up to $3 and I have seen them as high as $8 on Bourbon Street in New Orleans.

If banks would charge a reasonable fee for this instead of price gouging, they would not have laws like this passed.

Risky borrower NEED to be declined credit. People would be better off living without credit. If the credit card companies refuse credit to too many people they will go out of business. Discover raised my interest rate on my card, even though I was never late, never over limit, and usually paid off my balance every month. I cancelled that card and never used it again, even though interest charges really weren't an issue. They had no reason other than greed to raise my rate. Credit card companies need more rules on them. They lobbied for changes in the rules that allowed them to jack up the rates, and now they are being unfair.

I stopped using them after I stopped having them. I cut them up. Now I only use my bank debit card and I have to be careful to only spend what I have. If you really can't stop go to your local Consumer Credit Counseling Service (CCCS). I did that a few years ago and they helped me break my habit and helped me with paying off the $27,000 in debt I accrued.

Yes but the law needs to go further. Card companies should be held partly liable for their costumers financial demise. Credit Cards are a contemporary form of slavery. And the charge card companies are fully aware of it too.

1st of all it is over a year before they even take effect (a lot can be done in that time to tinker with them and to nullify their effectiveness)...2nd of all credit card companies are not made of stupid people so expect lots of changes with the advantage going to those credit card companies...Personally I will wait and see what happens and in meantime continue my practice of paying off all credit and using them sparingly.

As we exchange Presidents and their administrations, let’s also hold our representatives and senators, on both sides of the isle, responsible for their parts in the economic meltdown. The politicians below have been exposed for their unbridled greed, ignoring their fiduciary responsibilities, lying to and deceiving the American people.

(R) Chris Cox; Chair--Securities and Exchange Commission (SEC)

(R) Henry Paulson; Secretary of the Treasury

(D) Barney Frank; Chair--House Finance Committee

(D) Chris Dodd; Chair--Senate Banking Committee

(D) Chuck Schumer; Heads Joint Economic Committee

(D) Richard Syron; CEO--Freddie Mac.

(D) Frank Raines; CEO--Fanny Mae

(D) Charlie Rangel; Chair--Ways and Means Committee (W&MC)

(D) Pete Stark; Chair--W&MC subcommittee on Health

(D) Sandra Levin; Chair--W&MC subcommittee on Oversight

(D) Michael McNulty; Chair--W&MC subcommittee on Social Security

(D) Jim McDermott; Chair--W&MC subcommittee on Income Security and Support

(D) Richard Neal; Chair--W&MC subcommittee on Selected Revenue Measures