new credit card rules? heard it on the news!

[Cameron]

I paid off two credit cards a VISA and a Master Card in mid 2005, I didn't really need the cards and called to get a balance and pay them off. I then told the two companies to close the accounts. They protested saying it would damage my credit scores to payoff and close those two accounts. I closed them anyway!

I haven't had a credit card since May of 2005, in fact I have only one "debt" and that is a car lease, because I believe we should rent or lease a depreciating item and invest in appreciating items.

An absolutely clean credit report with no debt or credit cards and I still was able to get the best tier 1 money factor for the car lease.

Worse still, and for full disclosure, my company facilitates commercial real estate financing...

Cameron

[Bitter Clinger]

I simplify the whole credit card issue by choosing not to have one. I get one in the mail i just melt it. If i cant pay cash, i dont need it. On the other hand this does "damage" my credit. But i counter that with my car payments. Not the most ideal situation but it works for me.

[Hoosier]

So do you think the government has a role in protecting consumers? I mean, the credit card companies have a lot of lawyers who can write their contract. Whoever writes the contract owns the agreement.

In a situation without regulation do you think they would make it more conducive to the consumer or less? If there were no usury laws, what do you think the APR would be?

Although in a marketplace free of regulation, companies would theoretically compete and the consumer would win. However we also know that companies will buy each other until they reduce the number of offerings to the points where the can collude to fix prices (or APR) -- with or without government involvement.

We know the situations in which capitalism works, but we also know that once a company achieves a position of power in the marketplace, it will use that power to prevent others from being able to compete. My view of the market is that it's like a machine which needs to occasionally be pushed back towards the center.

I think my biggest problem with a lot of government legislation, especially stuff like this and healthcare, is that the industries that need to be regulated are the ones writing the legislation, and they're doing to their own benefit, not ours.

TL;DR -- if the market is really laissez faire companies will become monopolies and it's bad; if the market is centrally planned, the government becomes the monopoly and it's bad. Somewhere inbetween the two is the correct solution, and it's neither constant nor simple.

H.

[sabot_round]

We invite you to come out of your cave.
http://www.creditcards.com/credit-ca...ences-1282.php ...updated 08/20/09

Those were my thoughts exactly.

[Irving]

Consumers don't have to get credit cards though, and they don't have to choose the shady contracts.

I feel like there is a connection between shady contracts and consumer knowledge though. Might make a good thesis for someone to do a study on. Credit card companies shouldn't have to do shady stuff like moving due dates, then pressing late fees when the uninformed customer doesn't pay on time, to make money if people are as credit stupid as we all think they are.

[GreenScoutII]

My view of the market is that it's like a machine which needs to occasionally be pushed back towards the center.

I think my biggest problem with a lot of government legislation, especially stuff like this and healthcare, is that the industries that need to be regulated are the ones writing the legislation, and they're doing to their own benefit, not ours.

Well said Hoosier, and I agree. I think the free market is quite different in practise than in theory. I do think some regulation is necessary for most large industries. I know some people will counter that regulation is "bad for business", but I find what is good for business is frequently not so good for the rest of us.

I don't trust the government, but I trust big business even less.

If that makes me a liberal/Dem/whatever, so be it. Flame away.

[Cameron]

TL;DR -- if the market is really laissez faire companies will become monopolies and it's bad;
H.

How did you come to the conclusion that letting the people do as they choose will lead to monopolies?

It is the argument of the proponents of government control that capitalism and free enterprise mean companies will become monopolies. When in fact it is government interference in the market, typically barriers to entry, that cause the evolution on a monopoly or monopolistic competition.

The banks in the US have the hold they do over the American people because of the regulation and protection of the government. It is the governments "protection" of the consumer that causes the problem, think of the housing bubble, sub-prime mortgage debacle and the consequences to the people of government interference in the lending from banks to home owners.

A private company lending money to a private individual should not be regulated by the government in ANY way.

Cameron

[Irving]

In my opinion, the problems that arise are do not stem from lack of regulation in a free market, so much as they stem from companies thinking that a "long term plan" is 9 months in the future.

If anyone had kept the actual long term of the business in mind, the housing bubble never would have happened. Most bubbles probably wouldn't happen. Maybe.

[Cameron]

If anyone had kept the actual long term of the business in mind, the housing bubble never would have happened. Most bubbles probably wouldn't happen. Maybe.

If the Clinton administration hadn't expanded the scope of the Carter administration's ill-conceived Community Reinvestment Act in 1995 then we wouldn't have had the housing bubble. It is amazing to me that so many people believe it was the bank's greed the precipitated the mortgage backed securities collapse. Politicians blame the banks greed when they passed legislation mandating that the lenders make bad loans, and sued them when they didn't.

If you dig deep enough into any market "crisis" or lack of competition, you will find the hand of the government throwing a wrench into the cogs of the market.

Cameron

[Irving]

Yes, that is very very true.