America in the world's "Village Stocks"

How about Congress and the Administration, using part of the $787B Stimulus money, negotiate consumer debt down with credit card banks by paying them pennies on the dollar with our tax dollars instead of giving banks money to lower our credit limits, raise our rates and penalize us? Save credit revolvers which are most Americans a lot of time and put a boost on confidence, possibly decreasing unemployment.

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Starting today, the nation’s banks must comply with the Credit Card Act of 2009. Although most of the legislation’s key provisions will not take effect until February 2010, credit card companies must immediately begin to mail bills at least 21 days before their due dates and provide at least 45 days’ notice before making a significant change to their rates or fees.

Credit card reform was needed, but it’s not likely to help Americans kick their credit card habit just yet.

The credit card phenomenon has always felt eerily similar to a drinking problem. In moderation, it works for most of us. But once there’s a habit of overindulgence, things go south quickly. And with credit cards, the drinker doesn’t even have to pay up front for his martini.

Once hooked, many can’t get off the stuff easily. So it’s not surprising that the young are targeted. For years, credit card offers have flooded college campuses and teenagers with promises of easy credit. Starting in 2010, there will be far tighter restrictions on how companies can serve these under age drinkers. Congress will also require clearer disclosure about the terms of all credit card transactions, so the rules of the game can’t change mid-stream.

All well and good, but will the new rules make a real dent in the scourge of credit card debt? I’m not so sure. Over the past thirty years, many Americans have formed a dangerous habit. Read more.

• Consumers Cut Debt for 5th Straight Month (abcnews.go.com)
• Economists React: What’s Next After Cash-for-Clunkers Boost? (blogs.wsj.com)

Filed under: Credit Cards, Economy