Newswise — Legislation intended to protect consumers from the credit card industry by imposing new regulations on fees, disclosures and interest-rate changes may help but is no cure-all, says consumer psychologist Michael McCall.
The legislation that has passed the House and Senate, while helpful in some areas, neither caps interest rates nor credit card fees. McCall, a professor of marketing and law in the Ithaca College School of Business, says that the problem is much more complicated and that the root of the problem is the interaction between the credit issuer and the consumer. This is not being addressed.
"For years, there have been consumers who wanted things that they could not afford. This included expensive homes, vacations, boats, and other luxury items. Historically, the market—that is, the credit lenders—screened these requests with the idea that those consumers who had the ability to repay these debts were the most credit worthy. Somewhere along the way to this financial meltdown, opportunities and incentives to boost revenue led to a culture where lenders were reluctant to say 'no.'"
A nationally recognized consumer behavior expert, McCall has been quoted by USA Today, the Washington Post, the Los Angeles Times, and CNBC, among other media outlets. His research on consumer decisional models in such contexts as credit cards and debt repayment, customer loyalty, rebate usage, restaurant tipping, and underage drinking has been published in a number of academic journals.
For Michael McCall's full profile, go to http://www.ithaca.edu/news/experts2.php?experts_info_id=59.
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