The Geography of Usury

If you’ve ever wondered why your credit card bills are postmarked in Utah, Delaware, Virginia, or South Dakota, and why your interest rates are higher than you think should be legal, the map above might help.

Banks charter new usurious subsidiaries in states with high or non-existent caps on interest rates. Those subsidiaries then issue the credit cards. And here’s the catch: Even if you live in a state with a modicum of consumer protection, you’re out of luck if your credit card issuer sets up shop in Rapid City or Provo. The laws of the bank’s state, not yours, govern your rights.

So since the legislators in those states don’t have the stones to stand up to the banks’ lobbyists and their gift baskets of cash, everyone else in the country pays the price. Thanks so much.

For a good backgrounder on why credit cards can suck as much as they do, PBS’s Frontline has a great overview of the history of plastic money. Thanks to reader Billifer who pointed us to Mental Floss’s post, that riffed off Pennylicious, that was relying entirely on the PBS report we mentioned earlier. Jeez, what a mess.


Edit Your Comment

  1. Keira says:

    New Hampshire– “Live free or die. Wwell, die.”
    Utah– “You’re not a Mormon, so screw.”
    Virginia– “Avenging itself against the low-income Negro for four centuries”
    South Dakota– “sorry, it’s the only way to get anyone to move their business here”
    Arizona– “36% is not so bad, you illegal alien.”

  2. Mary Marsala with Fries says:

    The Frontline show was great; I caught it a while back, and still haven’t managed to kick the urge to kill and eat high-level bankers.

    Why on earth states are allowed to do this is completely beyond me. I’m also rather amazed that Michigan hasn’t done it yet, with our history of bending over backwards to cater to big, stupid businesses. But maybe it’ll be outlawed before it takes hold here (hope hope).

  3. lozerboozer says:

    It’s Bush’s fault!!!!