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Chapter 8. CREDIT CARDS > Very Interesting

Very Interesting

Comic actor Arte Johnson used to play a character on the television show, Rowan and Martin's Laugh-In who had a line that became part of the lexicon: “Very Interesting.” When credit cards first became part of the national landscape, they were not that interesting to the credit card companies. Each state had its own usury laws that limited the amount of interest that could be charged on credit cards provided to people within that state, and many of these states' interest rates were relatively low. The 1978 Supreme Court case of Marquette National Bank of Minneapolis vs. First Omaha Service Corp. changed things. This case involved the solicitation of Minnesota credit card customers by First Omaha, a Nebraska bank that was trying to use the higher interest rates allowed by Nebraska law rather than the low (at the time) 8 percent interest limit provided for by Minnesota law. In a landmark decision, the Supreme Court ruled that credit card issuers would be able to charge their out-of-state customers the highest interest rate permitted in the bank's home state.

The Marquette decision ushered in a new era in credit card expansion, with some states seeing this as an opportunity to attract banking business through the lifting of interest limiting usury laws.


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