July 22, 2008
Must Read Empirical Study on Credit Card Profits
This is a great article by a young Harvard fellow, Michael Simkovic, which establishes with empirical data that bankruptcy filings are down because of the amendments, credit card profits are up hugely since the amendments, and credit card companies have not passed the savings from fewer bankruptcy case writeoffs onto the consumer. Interest rates, late charges and other fees have risen in the past two years. Why? Apparently because of the lack of competition among credit card issuers, the lack of ability of the consumer to compare the rates of different issuers, and the lack of ability to change cards once the consumer is up to his ears in debt. The article can be accessed here.
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