Finally the measures to protect consumers against the credit card market might be legalized. Years ago, the measures have been introduced but there was no legislation yet. On April 21, Barack Obama announced that there will be a meeting of administration officials of the congress and card company executives on Thursday. This could finally be the break-through where a lot of people have been waiting for.
The measures are there to protect the consumer. A system of bills would be used and these would be responsible for banning card companies who ask ridiculous high interest rates and fees. It would also prevent young adults from getting credit cards and run up debts. Now more than ever credits cards are having bad influences on consumers’ wallets. In February the amount of money credit card companies can’t collect from their customers reached a new peak; it’s never been this high during the last 20 years.
Though there are a lot of people who are against these measures. Banking lobbyists warn us that these new and tougher rules could make credit card lending more costly. This could slow down the recovery of the credit markets that are undergoing hard times. During the 2008 elections, the credit card sector gave about $7.3 million to lawmakers in both political parties. The company Visa spent $1.7 million on lobbying according to the government lobbying registries.
I really hope that these measures will be legalized. It’s unbelievable how much interest some of the companies ask. A lot of normal people just don’t know how easy it is to run up debts and are likely to spend more money than they can actually have. I also find that young adults shouldn’t be able to get their hands on a credit card; they don’t know the value of money yet and it’s really dangerous for them also to build up debts.
I can conclude that the credit card market needs governmental guidance for the safety of the average consumer.
donderdag 23 april 2009
Obama to lean on credit card CEOs
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I agree with Niels because young people mostly don't know the value of the money. When they have a credit card they think they can buy everything they want because there is no limit and they get the bill just at the end of the month. The proposed measures are really important so we can avoid situation where people have to repay debts their whole lifes.
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