• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 9. FINE PRINT > What Interest Rate Will You Pay?

What Interest Rate Will You Pay?

With laws limiting interest rates (usury laws) why are some credit card interest rates so high? The answer is that only about half of the states have usury laws. The other states place no limit on credit card interest rates. Guess in which states most credit card issuers are located? You win. Or maybe you lose. If a company based in a state without interest rate limits issued your credit card, you may have to pay an interest rate on your card that exceeds the rate allowed by your state's law. As I indicated in Chapter 8, for this you have the United States Supreme Court to thank. In a 1978 case, Marquette National Bank of Minneapolis vs. First Omaha Service Corp., the court ruled that banks could charge whatever rates are allowed in their home states to customers who may live in other states that limit interest rates. For this reason, so many credit card issuers are based in North Dakota, Delaware, and Nebraska—states with laws favorable to lenders.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint