We’ve got government programs to back up home purchases (Freddie Mac and Fannie Mae), and now there is a possibility that a government-sponsored agency will be created to back credit card debt. Before you say "no way", consider that this is nothing unusual for many other countries. For example, Germany, India, Iceland and France all offer credit cards from state-owned banking institutions.
First of all, a state-backed credit card would offer lower rates than the typical credit card interest rate of 18% or more. A state-backed credit card might have an interest rate of 8% or so, and still be able to turn a profit. There wouldn’t be a need for the surprise hidden fees or notifications that your interest rate is increasing to two or three times the amount you had been paying.
Of course, you’d have to have really good credit scores to qualify for a state-backed credit cards but really, that’s the way it should have been from the beginning. When banks started lending credit to college students and people who had bad credit scores, (not to mention the number of mortgages that were given out to people who clearly wouldn’t be able to afford them) the economy as a whole began to decline. Now millions of people are debt-ridden and with the increased interest rates, they have very little hope of every climbing out of debt by making payments.
A benefit of state-backed credit cards would be similar to affinity or charity based cards. For example, with every purchase you make using your card, you could be giving a small percentage to wind-farm construction, green living, school equipment needs, or government research. Maybe a small percentage of credit card purchases could help fund the Social Security funds and balance the government budgets.
People are concerned that the government is sticking it’s "nose" in places it doesn’t belong, but the benefits of having government-backed credit cards are too good to ignore completely.
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