In the past, credit was only available to the very wealthy. Middle and low income families were limited to spend only what was in their paycheck or what they had saved over time. The credit revolution in the latter part of the 20th Century changed this.
The democratization of credit has been very good for consumers. A vast array of new credit instruments allows millions of Americans to use future earnings to finance purchases today. They can start new businesses, cope with unexpected emergencies, take family vacations and purchase new and better products, among many other uses.
The overwhelming majority of consumers managed this responsibly and achieved a higher quality of life. A very small number abused credit. Millions of responsible credit users should not be punished for the missteps of the very few.
Those that have abused credit should get help through education and counseling. Their actions shouldn’t result in millions of responsible consumers having their credit options limited. It isn’t only economically unwise, it is unfair.
Unfortunately, many “consumer advocates” take exactly this approach. They use the mistakes of a few to justify sweeping new government regulations and mandates that would severely restrict the credit available to responsible consumers.
The “consumer advocates” base their efforts on a fundamental misperception: that consumers are children who will make stupid decisions without their ‘protection’ or the heavy hand of government.