Shed no Tears for Missing the Great Credit Card Stock IPO

This guy’s real name is not Picker, but he or she has sure hit the nail on the head. Credit card loans will go the way of home mortgages. Stock market disasters are rarely universal. There will always be exceptions. However, small shells never stay dry when surf touches a beach. The wealthy will not be hurt by bad credit card loans. That includes credit card companies. The latter are not responsible for defaults by bank customers. The brand name on your plastic is no more than a visa to a margin on every transaction.

The margin that credit card companies have enjoyed on the sly is under attack. Powerful lobbies with resources to sway Congress are behind the movement against excessive and hidden charges by credit card companies. The Credit Card Reform Act of 2008 may not become law. However, some of its provisions will make the recent Initial Public Offering (IPO) by a credit card company look far less attractive than when it first hit the stock market.

The euphoria over a usual IPO is because the promoter is new to the stock market. An entrepreneur who has proven a business idea wants public funds to expand his or her enterprise. Is 2008 a good time for the world leader in plastic credit to launch an IPO? The stock market certainly thinks so. We wait to crow ‘we told you so’.