Some people have asked if the Federal Government regulates the Interest Rates a credit card company can charge.

Once upon a time, the Federal Government had a national cap on the amount of interest that could be charged on a loan. But after the Great Depression, it was repealed and it was left up to the individual States to place or implement “usury laws”. As you can see by your current interest and default rates, credit card companies found safe havens in certain states that either past laxed or no usury laws.

These clusters were largely formed by a 1978 Supreme Court decision that determined national banks only have to obey the interest-rate caps of the state that they are chartered in, not the state where the bank’s customer lives.

It may sound outrageous but that is why some credit card companies can charge as much as 60% interest and get a way with it. Maybe it’s time to start looking at a National Cap once again.

If you find yourself scrambling to make ends meet or just want to learn more about your financial options, log onto www.debtreliefoptions.com.

Jon Noble
Staff writer
Debt Relief Options
asktheexperts@debtreliefoptions.com

This entry was posted on Tuesday, May 30th, 2006 at 4:22 pm by Jon Noble and is filed under Debt Relief, Credit Counseling, Debt Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.