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Monday, June 8, 2009

Credit Card Reform Fnord

There's been a lot of hype in the mainstream media about "credit card reform".

When you buy something on a credit card, the bank gets something like 3% of the total purchase price. Most businesses accept the cost. A credit card is easier than handling cash. It's a way to buy over the telephone and over the Internet. A business that handles cash risks theft by its employees.

Even if you pay your balance in full each month, the credit card corporation still profits, via these fees. As a customer, you still pay this cost in the form of higher prices, although it isn't explicitly deducted from your purchase.

The "credit card reform" laws were written by lobbyists hired by executives at large credit card companies. The "reform" is going to be an excuse to raise prices. All regulations have the effect of raising costs and cementing the control by corporate monopolies/oligopolies.

One of the main effects of the "credit card reform" law is that people with good credit will pay higher fees, because credit card companies will have additional State-mandated costs.

A "reform" law is almost always written by lobbyists from the industry regulated.

The latest credit card reform law the usual disguised corporate welfare. The cost of the new regulations will be passed on to customers as higher prices.

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