A little late, and a little of both. A part of me is happy that some of these actions have been taken. But I'm worried, too. Worried that people with good credit will no longer be able to use credit to their advantage. For example, I have a card that years ago offered me a balance transfer at .99% (yes, you read that right--less than 1%) for the life of the balance transfer. Needless to say, I maxed the card with a balance transfer and have been paying only the minimum payments since. I'll never get money anywhere else cheaper than that, and I can invest it and get a great return. I haven't seen a decent balance transfer offer for over a year now. And it won't happen. The creditors can't make the money elsewhere now. Every account needs to be profitable. That means that people with good credit will be paying annual fees. We'll pay a fee if we don't carry a balance. Banks (they are the major card issuers, although there are others) are BUSINESSES. They are there to make PROFIT. As a shareholder in several banks, I am seriously concerned about the unintended (or maybe intentional) consequences in the long run. As an economist, I'm concerned about the long-term effect on our economy. Credit will be harder to get. Contrary to what a lot of people seem to think, this law doesn't say that everyone will get credit at a decent rate. Those with lower scores won't get ANY credit. And the cost will become so high for those with better scores that they won't take the terms offered. A level playing field isn't always good. While we do need to increase savings in this country, we don't want to contract the economy too much, and I'm afraid we might.
I agree, it's a mixed bag of emotions for me too. Some of the changes were long overdue (e.g. banning Universal Default), but others raise a lot of questions about what the long-term effects will be on our economy and the availability of consumer credit. Guess I'll just have to get used to higher annual fees, higher interest rates, crappier rewards programs, and lower credit limits, because that's where we're already heading.
It sure is. I don't like that part. I could have used some more good balance transfers and invested the money at higher returns, increasing wealth.
