Research Fellow Polina Vlasenko highlights the impact new credit card legislation will have on responsible borrowers in the July 28 issue of The Washington Times. Her full quotation is below:

Polina Vlasenko, a research fellow at the American Institute for Economic Research, said what irks her the most is that responsible borrowers are becoming the new victims under Congress' "law of unintended consequences."

"Borrowers with solid credit and a history of paying off their credit card charges on time are treated exactly the same as those with poor credit and a history of late payments," she said, because banks are no longer allowed to differentiate fees and rates for customers based on good or bad behavior.

People who always paid their bills on time and never went over their credit or checking account limits are now being hit with higher interest rates and fees, the reintroduction of annual card fees, fewer bonus features such as rebates and airline miles, and the refusal of some merchants to accept credit cards without minimum purchases.

Ms. Vlasenko said banks' practice of differentiating between customers based on credit risks is sound and necessary, and the high rates and fees on credit cards serve a purpose.

"There is a reason why credit cards carry high interest rates. It's because credit cards provide loans that are convenient for borrowers and risky for lenders," she said.

"Borrowers can get unsecured loans up to their credit limit on the spot, no questions asked, and can repay these loans at any time. No other financial product allows people to do this."

Click here to read the full article.

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