That isn't to say we don't like the new credit card law. We do. However, we have to acknowledge that politicians, who don't necessarily understand what is needed to keep the economy healthy, are likely to vote in ways that are popular. When regulators don't do their jobs, they open the door for politicians to make regulatory laws that may be more politically than economically advantageous. As Congress debated the bill that was to become the new credit card law, two ideas were bandied about that were essentially bad, and while one didn't make it, one did.
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According to the new law, people under 21 will need parent or guardian co-signers to get credit cards or will have to show proof they can successfully make payments. Thus, the new law makes the claim that people whom we trust to defend the country in the military and vote in national elections aren't trustworthy enough to use a credit card. That's preposterous.
Secondly, the nation dodged another potential disaster when Congress, in debating the new law, turned down a proposal that would have capped interest rates at 15%. This is solid evidence that these kinds of decisions, when put into the hands of legislators, can lead to dire consequences. While politicians and intellectuals might think capping rates will suddenly extend cheap credit to all, the truth is that the credit card industry would have simply responded by refusing credit cards to a significant portion of the population. For the consumer, this problem would have meant catastrophe. Without credit cards, even a card with a high interest rate, many people wouldn't be able to meet unexpected financial obligations such as car repairs or medical bills. Without a credit card, an emergency might wipe out a person financially.
