Time to Cancel the Credit Card: Bad Credit Card Users Bailed Out by the Good

Well it seems that the people that pay their bills every month now get hosed by people who are underwater in the new "Credit Card Bill of Rights"

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

If they charge interest as soon as you buy the thing then there is no reason at all why you would use a credit card instead of a debit card. I love how the law of unintended consequences keeps biting Congress in the ass. As this article points out this could serve to *limit* spending by people that have the greatest ability to pay back their credit card and *increase* spending from people who are underwater. In other words more defaults. I can't wait for 2010 to vote these incompetents out.