If you have ever paid attention to the return address on mail that you get from credit card companies, you probably have noticed an interesting trend. Many of these companies are based out of Wilmington, Delaware. What is it about this city that attracts so many of these businesses? Why do so many credit card companies call Wilmington home?
In essence, it all comes down to money. In the late 1970s and early 1980s, Wilmington residents were struggling to find work. In prior years, the area had a thriving shipping industry that kept many people employed. Unfortunately, that industry had begun to fade away, with more and more businesses doing their shipping elsewhere. Government officials, including the governor at the time, Pierre DuPont, were looking for ways to help bring more businesses to the area to stimulate the local economy.
To this end, they decided to focus on drawing banks away from the New York area and getting them to set up shop in Delaware. In order to make the area attractive for banks, they changed the laws of the state to make the area more appealing for businesses. This not only involved lowering tax rates for businesses but it also involved loosening up the laws surrounding the interest rates that banks were allowed to charge.
When banks like U.S. Bank and Chase saw that they could charge pretty much any interest rates they wanted if they were based in Delaware, they quickly took advantage of the situation, moving their credit card companies to the Wilmington area. After all, by basing their business out of Delaware, they could charge higher interest rates than they could if they were based out of another area. Most other states had upper limits on the interest rates that could be charged by banks as a way of protecting consumers from predatory lending practices.
Today, many credit card companies still call Wilmington home. That is why so many card offers come from this part of the country. If you receive a credit card offer from a company based out of Delaware, be sure to carefully read through the fine print of the offer. Because there are fewer restrictions on companies operating out of this area, they often try to take advantage of consumers. It is important to make sure that you are not being charged an excessive amount of interest – especially if you are applying for a credit card and have less-than-perfect credit.