180px-museemarine-sabreofficer-p1000451Bankers are talking tough now that the Senate has passed sweeping credit card reforms. From today’s New York Times:

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

No doubt some issuers will try each of those gambits–and then wind up backing off as their savviest (and most creditworthy) customers go to the competition.

Because the card industry is still highly competitive, and will remain so, at least when it comes to attracting and retaining low-risk customers. The only way I can see these threats sticking is if the card issuers collude (risking FTC intervention). While we waited for the lawsuits to grind through the system, we savvy consumers could use debit cards, checks or cash for our transactions–because heaven knows we’re not about to settle for a lousy credit card deal or pay a dime of unnecessary interest.

It’s true that it will be harder for college students to get credit cards, and those with poor or mediocre scores will continue to have trouble accessing credit, as they have since the credit crunch began.

NYT columnist Ron Lieber has it right: bankers’ ominous warnings about the credit-worthy paying the price for this legislation are so much sabre rattling.

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