Credit

Choosing a Credit Card

In shopping for a credit card, I found that one credit card issuer charges a higher rate than that allowed by my state law. How can that be?

Many states impose rate ceilings on retail or bank credit cards. However, these limits do not always apply across the board. For example, under federal law national banks may "export" their finance charge rates on credit cards. (State-chartered, federally insured institutions generally have the same exportation rights.) Thus, a national bank may issue cards from an office in South Dakota, a state that has no rate ceiling on bank cards, so the bank may charge cardholders in Iowa any rate the agreement specifies.

Nonetheless, if you believe that the rate being charged violates state law, you should report the case to the Office of Consumer Protection (or similar office) or your state's attorney general. Competition and enforcement activities usually prevent such violations, but if there is a violation, you may be able to recover all of your finance charges plus a penalty, depending upon your state's law.

>>What information do I have a right to?
>>How should I judge the APR shown in the solicitation?
>>Can I avoid paying a finance charge?
>>Does the APR on a credit card always stay the same?
>>Is there a charge each year for the right to use a credit card?
>>What other fees and charges should I look for on the disclosure statement?
>>In shopping for a credit card, I found that one credit card issuer charges a higher rate than that allowed by my state law. How can that be?

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