Credit cards have had transformative effects on the American economy. It has enabled the rise of the E-Commerce economy. It has provided significant benefits to consumers such as access to Automated Teller Machines (ATM), sources of credit, a transactional medium without the inconvenience of checks, and frequent flier miles, to name a few.

However, the myriad uses of credit cards have spawned increases in complexity in credit card terms and concerns about confusion that may reduce consumer welfare. This testimony addresses the question about the problem that regulation seeks to correct, and whether the benefits of regulation will justify the costs.