Stop Foreclosure

For The American Homeowner

Credit Card Wars: Obama V.S. The Credit Card Industry

President Obama has had it out for the Credit Card industry for quite some time. In fact for years president Obama has talked of a hypothetical Credit Card Holder bill of Rights.

Well it seems as if President Obama is now getting what he has so patiently waited for all these years. Obama is taking a shot at the entire credit Card Industry. He has managed to get several legislative restrictions to pass through both the house and Senate. He will undoubtedly sign it.

Some are saying that we as Americans are going to far to quick and getting carried away on a “big Government kick”. Should we be able to tell Credit Card Companies that they have to limit interest rates and fees to a certain amount. What happened to the free market creating the price. After all there is quite a bit of risk involved for the credit card companies.

For instance American Express, who has perhaps the most credit worthy clients out of all major credit card companies, has an 8% default rate. That means one out of every twelve dollars they are expecting back they don’t get. That’s a lot.

Many Credit Card Companies have much higher default rates. One such company which is much smaller than American Express and only focuses on small Business Credit Cards has decided to call it quits because of the Obama move against the freedoms of the Credit Card Companies to get the interest rates they can get.

They had a default rate of 16%. They also had one of the best customer satisfaction reputations in the industry. They are gone from the Credit card world. That will no doubt have an effect on the small business world.

I wonder how that helps any of us. How many jobs were just lost…will be lost?

Sometimes it might be better to push credit card companies and others like or similar to ease up on things during hard times such as these but to actually force your hand on an industry that loans money in an economy like this and in a supposedly free country like this a bad idea. This is especially true when you consider the consumer will not see any of the benefits until two years from now and until then we will just see the Credit Card companies super charge fees and pull back on risk.

I think Barrack Obama had it right with the mortgage companies. He worked with them not against them.

His mortgage assistance plan created to help homeowners make home affordable via loan modification, mortgage refinance, and other loan workout deals, has worked with lenders as well as for homeowners.

Perhaps his problem with the credit card industry is not so much with the terms of the revolving credit card accounts but rather the unscrupulous deceit that is involved in all the calculations of fee’s and interest that are not at all what the borrower originally signed up for.

Despite being a gun ho free market advocate I have to admit that well… maybe he has a point. Maybe if corporate America was able to reign in on their own practices and watch themselves instead of spending big bucks on resources that exist only to exploit the system for all it is worth, then maybe Obama would not have a problem.

Then the credit card companies that like to pose as innocent victims of big Government and uncertainty may not be in this mess in the first place. After all it seems that these new regulations do little more than try to prevent the credit card companies from hiding how and how much they are charging their clients. That is starting to seem rather reasonable.

We have to work with Business not against them. But Business has to work with us not against us.

Perhaps a Credit Card Bill of Rights for Consumers is not such a bad idea after all.

November 22, 2010 - Posted by | finance


  1. A debt management plan is one option for breaking free of unsecured debts. You would work with a third party who would get in touch with your creditors and work out a plan for you to pay back the money you owed over a period of time, usually with reduced payments. Once you have gone into the deal creditors will not be on your back for payments and if you stick with the plan you will have become debt free once the term of the plan has been reached.

    Comment by Oliver Darraugh | August 16, 2009 | Reply

  2. Hey guys as a side note this was in large part written in the year 2009. I found it in the draft section of the admin platform here on wordpress and I made a few very quick touch ups a published it.

    Just thought I would let u know so u dont think that i have been living under a rock for a year or two.


    Comment by hope002 | November 22, 2010 | Reply

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