the responsible people get screwed again

[bpwallace49]

As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.

 

"There will be one-size-fits-all pricing, and as a result, you'll see the industry will be more egalitarian in terms of its revenue base," said David Robertson, publisher of the Nilson Report, which tracks the credit card business.

 

People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks .

 

"Despite all the terrible things that have been said, you're making out like a bandit," he said. "That's a third of credit card customers, 50 million people who have gotten a great deal."

 

Robert Hammer, an industry consultant, said the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders -- "deadbeats" in industry parlance, because they generate scant fee revenue.

 

"They aren't charities. They have shareholders to report to," he said, referring to banks and credit card companies. "Whatever is left in the model to work from, they will start to maneuver."

 

Wow. Conservatives getting angry when a business acts in its own best interests. AMAZING.

 

Perch, they are answering to their shareholders. Arent you HAPPY about that? Kinda the opposite of the Chrysler deal isnt it?

[i_am_the_swammi]

Pissed because fedgov intervention will force the fee on us. That's what upsets this applecart.

 

Incorrect.

 

There are federal guidelines that affect almost every business. Why aren't you up in arms because the FDA puts regulations on the way foods are packaged, forces them to list their ingredients and nutritional value, etc. How about all the regulations about prescription drugs? Costs which are passed along to you, the consumer, in the form of higher prices. No one seems to care that Kelloggs could likely sell us a box of Frosted Flakes for $2, but due to the costs of packaging and printing requirements, and cleanliness guidelines put forth by your government, the costs rise to $3.50 a box. Multiply that scenario by about 50,000, and you have yourself a supermarket full of governent regulation that no one seems to care about because we accept it without thinking about it.

 

Which is what we will all do 2 years from now when everyone gets used credit card practices.

 

But don't be so naive to think that profit margin is not driving this decision. If a $30 fee to everyone isindeed incurred, it will be because the cc companies want to conitinue to make their 15% profit (rather than 13-14%).

 

 

 

The reason you are not upset today is because these guidelines have been in effect for years, and are now commonplace and accepted.

[Big John]

I No one seems to care that Kelloggs could likely sell us a box of Frosted Flakes for $2, but due to the costs of packaging and printing requirements, and cleanliness guidelines put forth by your government, the costs rise to $3.50 a box.

Off topic, but I see other factors in play there as a store brand can be $2 and have the same regulations.

[Pope Flick]

Off topic, but I see other factors in play there as a store brand can be $2 and have the same regulations.

 

 

Don't mess with Tony the Tiger.

[i_am_the_swammi]

Off topic, but I see other factors in play there as a store brand can be $2 and have the same regulations.

 

Yep....and thanks for furthering my point, BJ. Its all about corporate profits, not government regulations.

 

So the net cost of manufacturing the product is $1.001.50, the generic brand charges us $2, and the "name" brand charges us $3.50. The generic brand can charge us less because they are making money on a plethera of products, where kelloggs only makes money on breakfast foods.

 

I think the point is, corporations are only looking out for themselves and their profits (credit card companies included), and the cost of government regualtions are priced into almost everything we buy or use today....why would credit cards be any different?

Edited May 23, 2009 by i_am_the_swammi

[Perchoutofwater]

Wow. Conservatives getting angry when a business acts in its own best interests. AMAZING.

 

Perch, they are answering to their shareholders. Arent you HAPPY about that? Kinda the opposite of the Chrysler deal isnt it?

 

First with Chrysler, it was bond holders, not share holders, a big difference. The agitation there is the bond holders had the highest claim to Chrysler's assets and Obama decided to piss on the law and reward his campaign contributors instead of following the law.

 

With regard to the credit card companies, conservatives aren't mad at the credit card companies. We are mad at the government for the regulation that has forced the credit card companies to do this. The credit card companies reaction is a responsible reaction to an irresponsible over reaction on the part of congress.

 

So in short, you are wrong on all counts.

[Perchoutofwater]

Yep....and thanks for furthering my point, BJ. Its all about corporate profits, not government regulations.

 

So the net cost of manufacturing the product is $1.001.50, the generic brand charges us $2, and the "name" brand charges us $3.50. The generic brand can charge us less because they are making money on a plethera of products, where kelloggs only makes money on breakfast foods.

 

I think the point is, corporations are only looking out for themselves and their profits (credit card companies included), and the cost of government regualtions are priced into almost everything we buy or use today....why would credit cards be any different?

 

Some regulation can be justified as needed to protect our physical safety. I don't see this regulation as falling into that category. It could also be argued that in today's litigious society we could probably do with out most regulations that were originally put in place to protect our physical safety, as law suits would bankrupt a firm that ignores product safety.

[jaxfactor]

wrong, you can rent a car with a debit card

 

 

I tried a few years ago in Pittsburgh and had planty of money for the deposit and Enterprise still wouldn't take it. They must be commie bastages.

[The Irish Doggy]

The cereal business is an oligopoly. That is why cereal is expensive.

[Pope Flick]

First with Chrysler, it was bond holders, not share holders, a big difference. The agitation there is the bond holders had the highest claim to Chrysler's assets and Obama decided to piss on the law and reward his campaign contributors instead of following the law.

 

With regard to the credit card companies, conservatives aren't mad at the credit card companies. We are mad at the government for the regulation that has forced the credit card companies to do this. The credit card companies reaction is a responsible reaction to an irresponsible over reaction on the part of congress.

 

So in short, you are wrong on all counts.

 

 

And at 90-5 passage you can argue that too much deregulation had occurred in the industry. So perhaps YOU are wrong?

[bpwallace49]

forced the credit card companies to do this.

 

The credit card companies dont HAVE to eliminate all your "welfare benefits" on your credit card perch. They CHOOSE to so they can make more money.

 

It is your CHOICE to continue to use those cards or not.

 

So stop yer biatchin . . .

[i_am_the_swammi]

Some regulation can be justified as needed to protect our physical safety. I don't see this regulation as falling into that category. It could also be argued that in today's litigious society we could probably do with out most regulations that were originally put in place to protect our physical safety, as law suits would bankrupt a firm that ignores product safety.

 

Again, you seem to want to miss the point.

 

The government isn't causing the credit companies to charge an annual fee. The credit card companies want to continue to make a certain profit margin on their product, so in lieu of being able to raise your rates without warning (which now is a revenue source that was deemed unfair by a 90-5 vote), they'll just charge everyone a flat fee.

 

You don't want to blame every other industry for making a profit, but want the credit card companies to have carte blanche.

 

Your distaste for Obama is affecting your common sense.

[polksalet]

Again, you seem to want to miss the point.

 

The government isn't causing the credit companies to charge an annual fee. The credit card companies want to continue to make a certain profit margin on their product, so in lieu of being able to raise your rates without warning (which now is a revenue source that was deemed unfair by a 90-5 vote), they'll just charge everyone a flat fee.

 

You don't want to blame every other industry for making a profit, but want the credit card companies to have carte blanche.

 

Your distaste for Obama is affecting your common sense.

 

Anyone who dislikes anything Obama does is only acting on their own racism. There is a special place i hell for racists like that. I for one will be glad when we refire the ovens of Auschwitz and instead of burning an ethnic minority, instead burn the ignorant racists who dare dissent with our magnificent leader. I say that if racists want to go to hell , we should help send them on their way. If God didn't want Osama to be president he wouldn't be. Allah Akbar girl dogs.

Edited May 23, 2009 by polksalet