I see a story in the NYTimes this morning that credit card companies, faced with government restrictions on their outrageous fees, high interest rates and profits based on taking advantage of the poor, will simply start charging customers who pay off on time more.
The story can be read here (click!) My take: What a screw job.
The story says people who pay off their balances on time are getting a “free ride,” but that’s baloney and I’m amazed the reporter let it pass. People who pay on time still must absorb the transaction fee in the cost of what they buy. You think businesses don’t pass that stuff on?
What’s really going on here is that the banks are acting like the Mafia — they figured out a way to make huge amounts of money by hooking the country on credit and milking the suckers for all they’re worth. Now someone tells them to back off but they’re already planning on making those profits in the future — that money is already committed, if not actually spent.
So, they say to themselves, “Well, we’ve got all these people hooked on credit. Like any good crack dealer, we’ll just raise the price. What are they gonna do?
A pair of scissors, that’s what I’ll do. Go back to cash if I have to. And while that may not be practical, faced with having to pay a fee every time I use the thing, you can bet it will get used less.
Which is precisely what the economy, which they claim to be so concerned about, doesn’t want right now. It’s the people with money to spend — as shown by their ability to pay off their bills right now — who are keeping this economy afloat, not the folks up to their ears in debt and foreclosure.
Be nice to us, or we’ll cut back too. And then where will you be, you greedy banker you?