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Wednesday, March 18, 2009

86 Isn't Enough

This is another installment in my "corporate greed" rant...

As if reaching 86 year of age is not enough, a close friend of mine just got another present in her mail. The "present" was a little notice from Chase, saying that her APR (Annual Percentage Rate) was going up on her credit card. The bank cited that "We are sending you this notice to let you know that we will be making some changes to your credit card account in response to market conditions and to maintain profitability on your account." Basically, these changes amounted to raising her finance charge on current and future balances by 2.24 percent. That may, of course, not sound like much, but, on a balance over $1,000 and over the time of the "loan" it really adds up... Luckily, my friend has her current balance of just under $7,000 in one of those promo APRs card companies have been issuing lately. This one is zero percent for six months and and then raises after. Some luck, huh... My thought all along has been the credit cards are inherently evil anyway... They hide out in places such as South Dakota and Delaware because these are the main States that have either weak or no "usury laws" meaning there is no cap on the interest rate that is charged. Check the return address on your statement, you may notice your credit card issuer is located in a State such as South Dakota or Delaware. There is even a top ten list of States where credit card companies are located. The federal government once had national usury laws that set a cap on the amount of interest that could be charged on a loan. After the Great Depression, it repealed them and some States put no new usury laws in place. That's why Citibank, the issuer of Mastercard, moved to South Dakota, which has no cap on interest rates. See the map below.
More to come...

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