The State of Delaware has been a rabble-rouser since the beginning.   As the first state to ratify the U.S. Constitution on December 7, 1787, Delaware is no stranger to doing its own thing.  Delaware’s independent mind has also brought it to the attention of major credit card companies.  There’s a good chance that the return address on your recent credit card statement is pointing back to America’s tract of land.  No, credit card companies aren’t showering Delaware with honors for the achievement, rather they are benefitting from Delaware’s lack of a cap on interest rates.

Delaware isn’t the only state that’s considered a safe haven for credit card companies, South Dakota doesn’t have a cap on interest rates either, so don’t be too quick to raise an uproar against America’s 49^th smallest state.  Due to some Supreme Court rulings in the 80s, states’ abilities to set a limit on interest rates were restricted.  Even if the state you currently live in has capped the amount of interest you can be charged, creditors are able to import credit rates from the states in which they are located.  So if you live in Michigan, Arizona, Rhode Island, Alabama, etc., owning a credit card in that state does not subscribe your credit interest limits to the limits of those respective states.    

While states were once at the helm of the interest rate boat, Delaware and South Dakota have taken over the captain’s chair when it comes to credit cards.  However, don’t think of Delaware as being just Jersey’s rebellious southern brother.  Delaware was the first state to have log cabins, and c’mon, Abe Lincoln lived in one of those.  If the Fins would never have brought plans for the log cabin to Delaware, where would famous Abe have lived?  I don’t think Lincoln in a tree house or in an igloo would have been as iconic, probably just strange.  I mean an igloo in Illinois?  Sounds like witchcraft to me, not something dear old Abe would have been much for (or a high interest rate on his credit card debt).

Though, maybe Delaware is trying to toughen its image as a bully among the states - an “it’s not the size of the dog in the fight, it’s the size of the fight in the dog” deal.  The state bird is the Blue Hen Chicken, a bird notorious for its combative ability.   For any of you states relying on the chickadee to protect you (ahem, Maine and Massachusetts), you should realize by now that Delaware is going to do its thing and I’m placing bets on the chicken (but only if cockfighting is legalized in Delaware first). 

This entry was posted on Monday, July 14th, 2008 at 5:19 am and is filed under Credit Cards. 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.