Many people often wonder why it is that their credit card bills come to them from Sioux Falls in South Dakota. The simple reasoning for this is that South Dakota is the home of very liberal laws concerning consumer protections for credit cards. The state of South Dakota receives a great deal of revenue from it's partner in crime, the credit card industry. Albeit it is certain that the absence of corporate income taxes plays a huge factor as well. There are many financial service companies located in South Dakota include Great Western Bank, Total Card Inc., BankFirst, Capital Card Services, HSBC, PREMIER Bankcard, and Wells Fargo.
Credit card fees over the years recently have skyrocketed from $2.6 billion in 1980 to over $22.5 billion in 2006. The thing that has a great number of consumers and advocates irked is a common practice named "universal default""universal default". In this scheme when you are late paying any bill, the credit card company will raise your rate, sending some rates far higher than 20%. There have been many criticisms of this structure including the concept of one lender charging a higher price when their customer defaults with another lender has been compared to having a cartel, or price fixing structure. A major concern to many folks is the possibility that the credit card shown as being in a state of default may not simply be so. It very well could be the result of an error on the part of the credit card issuer. If this is the case, while the customer has full legal rights to have the error corrected on his credit report, any lender who instituted the universal default rate is under no obligation to return to the normal rate. Naturally, this sort of position puts many credit card consumers in a state akin to anger. Simply put, this is not right.
Over the last few years there have been several attempts by concerned congressmen to simply have the practice of universal default outlawed. One such congressman was Sen. Chris Dodd, D-Conn. Still, these card companies are also amongst the political party contributors, and seeking meaningful changes such as these in the face of subtle corruption has always been a daunting task. "I've never been able to get a bill passed of any major significance because they're so big and so influential," says Dodd.
The American Bankers Association, a free-trade and professional association that advocates issues deemed important by the banking industry in the United States has systematically been on the front of protecting the practice of universal default via it's Political Action Committees which use lobbyists to work for laws that are advantageous for the banking industry.
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