South Dakota Credit Card Gaining Popularity

By: EconomyWatch Content Team   Date: 2 February 2010

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While there are numerous choices when it comes to a South Dakota credit card, one company in particular has been heavily involved with cards from this state and others.  Citibank is a huge company that has offices throughout the country but they have a special connection to the state of South Dakota.  For instance, when people who have a Citibank credit card, whether another state or a South Dakota credit card, the bill is initiated from South Dakota.

In fact, not only does Citibank send out bills from this state by this is also the state to where people mail payments.  Since this company actually has its headquarters established in New York, it makes people wonder.  These processes coming from South Dakota are actually based on a unique strategy.  The reason is that both federal law and laws for all 50 states allow a New York-based bank to bill California customers from a South Dakota address.  This way, Citibank can operate at a high level of performance and in a more efficient way.

One possible concern specific to a South Dakota credit card account is that this particular state is not subject to a “usury law”.  Most other states are bound by this law, which puts restrictions on credit card companies, banks, and credit unions pertaining to the amount of interest they can charge.  The cap for most laws is at 18% but without South Dakota not having this law, they can charge interest as high as they want.  However, the new Credit Card Protection Act of 2009 has reined in the situations in which interest rates can be charged.

People looking to open a South Dakota credit card account need to remember one important that laws have been put in place for a reason.  As an example, just as interstate commerce is regulated by the government, so are chartered banks that conduct business in multiple states.  This ruling was established more than 30 years ago to allow credit card companies more flexibility.  This particular law actually overrode usury laws that were imbalanced, which stopped credit card issuing companies from relocating the business to a state where they could charge high rates.

However, to protect people with a South Dakota credit card account, or any state’s card further, another law was enacted in 1999, known as the Gramm-Leach Bliley Financial Modernization Act.  With this, banks had more regulations on the way in which cardholder’s personal information was being protected.  Over the years, a number of other laws have been established that are fair to issuing companies but also the person that has a South Dakota credit card or card from any state.

Although new regulations, deregulations, and renewed regulations have made it possible for banks and credit unions to make some important decisions, it has also helped protect consumers.  Even with the government overseeing different issues relating to credit cards, anyone looking for a South Dakota credit card or any credit card needs to take responsibility in looking at all the terms and conditions.  That way, there are no misconceptions or surprises, only benefits from the specific card chosen.


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