The impending enactment of new credit card law is poised to rob retailers of $9 billion in holiday sales compared to last year. The law, designed to protect consumers from rates being raised on the sly and sneaky fees, already has led to lower credit limits and more rejected applications than usual. “Diminished availability of credit equals diminished spending,” a Target exec tells Bloomberg, helpfully.
If the credit card companies weren’t cleaning house ahead of the new regulations' start date in February, spending would be up 0.8% over last year, instead of the projected drop of 1.2%, one analyst says. “We’re scared to death of what this law is going to do,” adds another retailer. “It’s definitely going to hurt consumer spending.” Cry me a river, replies Rep. Carolyn Maloney, the bill’s sponsor. “Much of the damage was and is self-inflicted.”