Obama’s Plan to Ease Credit - Will it help credit card holders?
Feb 1st, 2009 | By Rob | Category: Obama
President Barack Obama promised on his weekly radio and internet address Saturday that Treasury Secretary Timothy Geithner would soon announce a new plan to lower mortgage costs, extend loans to small business to create jobs, and revive the financial system to get credit flowing again.
During the bank bailout debates in September and October of this year, a common criticism of the bailout plan was that the plan bailed out Wall Street but did nothing to help Main Street. Just two weeks in to his first term in office, it sounds as if President Obama is looking to move quickly to rectify that omission. Between the economic stimulus plan and this new proposal to get credit flowing to small businesses and individuals, it sounds like an aggressive set of policy initiatives are on the way from the first term President.
My question about the White House proposal, though, is this: How will it help the individuals holding credit cards who are facing reductions in their credit limits and increases in the interest that they pay on their debt?
If the nation is going to get credit flowing again, it has to tackle the problem of how to turn individuals who do not have great credit into people that the banks are willing to lend money to again. And it has to help those people manage their debt and maintain their credit. Lowering mortgage costs is great, of course. But if it doesn’t help borrowers meet the new, tougher standards from banks for accessing credit, then it only begins to address the problem.
