Overcharged and Over a Barrel

"I'm mad at credit card companies for making the rules, but I'm also mad at consumers for accepting them," he said recently when we were discussing the proposed rule changes. "There's no way those terms were fair to anybody -- no matter how affluent. Consumers should have refused to accept them. If they had, the marketplace would have prevailed, and the credit card companies would have withdrawn them."

He's right, you know. The Fed wouldn't have to be imposing these new rules if we weren't such chumps.

My friend hasn't used a credit card in years. He doesn't use credit because he fundamentally does not like the way the companies do business. I admire him for his integrity in this respect. How many times have you sworn at your credit card issuer for some standard practice and yet still pulled out that plastic to pay for something?

Credit card issuers argue that the way they do business reflects the risks of different consumers. Now that we're in a recession, many people who had considered themselves model customers are seeing how unfair the credit game is. They are seeing their credit limits being slashed or interest rates pushed.

If the Fed does make substantial changes to the rules governing the credit card industry, it's likely that consumers with good credit histories will end up with higher rates. I don't doubt what the American Bankers Association says when it argues that the rule changes will all but end zero- or low-interest balance transfer offers.

Ah, but rest assured that the lenders will find a way to continue granting credit and charging whatever the market will bear. That's because this particular market has shown it will bear just about anything for the privilege of paying with plastic.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and at http://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail: singletarym@washpost.com.

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