The History of Credit Cards Has Fundamental Parallels to the Discussion of Health Care Reform
In 1980, Citibank was going broke.Rises in inflation meant that they were paying more to borrow money than they could get by lending it to their credit card customers. New York's strict usury rules (caps on interest rates to consumers) sent Citibank out on a hunt for a new base of operations. At the same time, the economy of South Dakota was deep in a spiral. Wanting to bring in new industry, South Dakota drafted legislation overnight and in less than 24 hours, formally asked the nationally chartered Citibank to move to South Dakota, and in doing so, modern credit card exploitation was born. Even people who lived in New York were no longer protected from the sky high interest rates imposed by credit card companies, even though the laws were on the books.
