From Citi:
“We have the right to change the rates, fees, and terms at any time, for any reason, in accordance with the cardmember agreement and applicable law. These reasons may be based on information in your credit report, such as your failure to make payments to another creditor when due, amounts owed to other creditors, the number of credit accounts outstanding, or the number of credit inquiries. ”

A credit card is a revolving loan, you sign a contract when you apply. If you do not pay off your loan each month, then you must face the consequences. Unfair rate kikes, fees, double cycle billing are agreed to by the consumer. It is your responsiblity to understand the contract you sign. If you don’t like the terms, find another card or don’t sign up.

I wrote about this on my own site (just, like, 2 seconds ago!), but I’ll summerize here: we need to focus on things that actually work, instead of trying to regulate our way out of this problem. One thing that I’ve seen work really well is colleges that ban credit card companies from soliciting on their campuses. My college did it, and most of my friends didn’t even get credit cards, let alone abuse them. Will they be more responsible if they get a credit card later on in life? I hope so. I think it needs to be a joint effort though – banning credit card companies from campus, and teaching money management skills to the student body at the same time.

I applaud all of you for being responsible with credit. I’m sure most of you come from stable backgrounds and good educations. I don’t carry a balance on my cards either. You have to understand that many people with credit issues have not had the same access to consumer education that you have had. I’m all for rules that help to protect consumers from the really odious practices of the industry. If anything, this bill does not go far enough.

As far as credit card companies cutting back on “goodies”, this is all bluster. They want to keep all of you as customers as replacing you costs them a ton of money and there is too much competition out there for your business. If your rewards get cut back, cancel your card. You will take a hit on your credit score, but it’s only temporary.

Secondly, the 21 year old requirement is absurd. If society is going to make 18 the legal age of adulthood then every 18 year old should have the same rights as any other adult. I opened my first credit card at 18 and now 5 years later I have an excellent credit rating in the high 700s. Credit cards have also been an invaluable tool to improve liquidity issues that many young adults have entering the “real world”.

I agree that some of the credit card company practices were bad but using the government to try to solve the problem is simply the wrong approach.

I do not think that the bill is perfect but I think it is showing some responsibility for protecting our young people when parents are not teaching their children about money.

However, the problem is that people’s poor choices in terms of credit card debt have negatively affected the entire nation because politicians are swayed by populist appeal.

If we lived in a truly capitalist country, one in which no companies were “too big to fail,” one in which responsible individuals were not expected to bail out irresponsible individuals, then I would be opposed to credit card regulation. However, the United States is not that type of country anymore. Perhaps it never was.

Get used to this type of thing because it’s only going to become more common. We are not individuals in little row boats, merrily making our way upstream. We are shackled together, for better or for worse, with some of us (responsible people) making up for the laziness of others.

Is this truly a free market? No. Of course it’s not. Is it the “most free” market in the world. I’d say so.

In other words, I’m all for the government regulating the madness of credit card debt, the PayDay Loan for the middle class.

P.S. – I have no credit card debt, don’t use them, and never will.

I’ll be the first to admit that this bill is far from perfect (the 21 thing is entirely disagreeable with me) but it’s a step in the right direction to me. Call me an optimist I guess.

Ask yourself why companies are being blamed for the reckless decision of some individuals? Credit card companies don’t do anything that they don’t warn you about when you apply for your credit card. It blows my mind that people are rejoicing at companies being punished for offering a service that is clearly in demand.