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.