I have been following the credit card reform being championed by President Obama. Then I read this article at The Whig blog about the silence of Vice President Biden. In my opinion, I think the Vice President is dead on opposing this legislation. I’ll do my best to keep this more politically based rather than being a rant.

I receive credit card offers every day. They offer great 0% APR for a year and low rate balance transfers. It takes about 2 minutes to read through the first page of the offer and notice the related fee’s. That’s because credit card companies are already required to divulge all of the details related to the offer. So the “hidden fee’s” associated with credit cards would be better named “fee’s I got stuck paying because I was too lazy to read the fine print”. This is not the fault of the credit card companies and I don’t think they should be punished for the “buy now, do my budget later” mentality of many Americans. The reason we got in to the subprime mortgage mess was because people were unable to realize they couldn’t afford to pay variable rate mortgages. For all the blaming of the mortgage companies and AIG, there has been marginal blame on the consumer.

These “reforms” will essentially remove the punishment system built by the credit card companies. If you make poor decisions such as not paying your bill or taking cash advances on your credit card, you pay higher fee’s. That make’s complete sense to me. If you don’t pay your mortgage, they take your house. So now we are bailing out the people who can’t pay their mortgage or their credit cards and saying “it’s not your fault”. Someone tell me how this helps our nation’s problem of over consumption? At the household level, Chinese families save over 50% of their income, do you want to guess what American’s save? Try 0%. That is obviously a major problem. By consoling these mistakes we will not be teaching American’s the lesson they need to learn. Live within your means.