The federal government, as a gift to the nation's credit-card issuers, have exempted them from usury laws of New York and many other states, by allowing them to operate out of states such as Delaware, Utah and North Dakota that have no laws prohibiting usury (i.e., no laws prohibiting excessive interest on borrowed money). As a result, the credit-card companies are able to charge 1,000% true annual interest and more.
There is one major area where the credit-card companies are vulnerable. This is in disclosure of their terms and conditions, including changing interest rates, late-fee charges, loan transaction interest and loan transaction one-time charges, among other fees and charges. If any of the onerous terms and conditions are not spelled out properly, it may be appropriate to commence a lawsuit to recover damages for credit card holders.
Late fees are skyrocketing and for many financial companies represent 50% or more of their profits. These fees are charged with very little related cost to the financial company because the late fees are not imposed according to risk, but according to how much the market will bear, and the failure of credit card holders to manage their credit cards to be able to avoid using credit cards with the highest late fees.