Unintended consequences
July 29, 2009 | alternatives, federal legislation, industry | Comments (0)US News & World Report thinks the recently passed credit card law is already affecting consumers, but not in a good way:
The credit card companies have made several changes in response to these new restrictions. First, fixed rate cards are becoming a thing of the past. Major credit card issuers have moved to variable rate cards to help insulate their portfolio from interest rate risk. J.P. Morgan and Bank of America are just the latest examples of card issuers moving to variable rates. Second, interest rates on cards have gone up sharply, even while other rates have remained historically low. The increases have led Senator Schumer (D-NY) to ask the Federal Reserve to use its emergency powers to immediately limit rate increases.
Do lawmakers not understand that the goal of every business is to remain profitable?
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