Sunday, May 24, 2009

new restrictions on US credit cards

A US bill that is designed to protect credit card users from unexpected fees or increases to their interest rates has just been signed into law.

US banking industry sources have warned the US policy makers that the changes may reduce the amount of credit available to some card holders because they argue that these new rules will make it more difficult for credit card operators to set rates based on the risk a customer poses.

Yet, with Americans currently owing almost USD 1 trillion (!!!) on their credit cards, it is obvious that consumer debt is a crucial parameter of the US economy, whereas this iis not the case in some European countries.

Is the over-reliance of individuals and households on debt one of the faults of this, un-orthodox, model of capitalism?

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BRs
Nick

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