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Ed Zimmer
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Ed is a graduate of The School of the Ozarks (now known as College of the Ozarks) in Southwest Missouri. He spent 14 years in broadcast news in the Midwest covering, among other things, commodities. He is currently manager of a healthcare support facility doing over two million dollars a year in... More
  • Credit Card Issues show their True Colors 1 comment
    Jul 1, 2009 9:01 AM

       Does anyone else have a problem with credit card issuers who recieved a tax payer bailout, jacking up interest rates to taxpayers before new restrictions on such actions take effect next year?

       Taxpayers money, in the form of the government deficit spending, provided a bailout when the banks blew up and wrecked the economy.    Billions of dollars were spent to provide "liquidity" and trillions pledged to back up "toxic assets".    Then the rules were changed to allow "mark to fantasy" rather than "mark to market" so that the toxic assests could be changed to "golden assets" with the wave of an accountants wand.    Money to some of the banks was immediately channels through sweetheart deals to close out dead CDS's at face value and the banks reported record profits in the first quarter.

       But the overleveredged taxpayer, who has taken it in the shorts to the tune of nearly 1.8 trillion dollars, experiences a continuing rise in "official" unemployment numbers, now has to face the same banks who are jacking up interest rates on existing credit card accounts before congressional action takes effect in February, prohibiting such action.     If you were overleveredged before, you are sunk now.    Why congress didn't make the new rules effective immediately is beyound stupidity.     

      And issuing banks have the brass ----'s to blame Congress for the increase, saying that Congress shouldn't have messed with them.    Talk about biting the hand that fed you.

      Our economy is already staggering like a punch drunk fighter, and now the banks want to slip into the ring and hit him from behind with his own stool.    People who were just barely making the minimum's before will likely fold now.   People who wanted credit before for major purchases such as appliances will now back off, further depressing the economy.     You thought americans were thrifty before, this will further separate the have from the have nots.

      We used to save up for things we wanted, and made do with things we could do without.    What with fees rising, credit card interest rates jumping and the economy continuing to look like a toddler on a binge, we may just have to take a cue from the 1940's and do without.     Front porch on a summer's eve might just be the new destination for vacation.   I have a few projects around the home I need to work on too.

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  • Tom Au, CFA
    , contributor
    Comments (6879) | Send Message
     
    The banks are over the top. It's time that Congress went back into session and made the rules effective immediately, no, retroactively.
    1 Jul 2009, 09:32 AM Reply Like
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