In December 2008 Ann Minch of Red Bluff, CA paid 12.99% interest on an outstanding credit card balance with B of A. In July 2009, the rate was 30%. Ms Minch has closed her accounts and posted this video...
The state crime of usury (an unconscionable or exorbitant rate or amount of interest charged to a borrower for the use of money), was effectively repealed in 1978 by Marquette vs. First Omaha Service Corp., in which the U.S. Supreme Court ruled that a national bank could charge the highest interest rate allowed in their home state to customers living anywhere in the United States, including states with restrictive interest caps.
As a result major credit card issuers are based in states (like South Dakota) without usury laws and interest rate caps on credit cards.
Ironically, the page enititled "Credit card companies sidestep usury laws" at BankRate.com that served as a source for this post is headed with a banner ad for Bank of America.
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