The average American owns about 8 credit cards and uses it for almost every day to day transaction. Use of credit cards has proven to be a very convenient way to purchase goods and services especially to travelers. Credit cards have become indispensable in today's fast -paced lifestyle. However, despite the convenience it provides the users, they are also responsible for the current economic crisis that we are all currently experiencing.

Let me give you a brief historical background on America's credit card business. Credit card companies mainly have their central office located in New York. In the big apple, there is this thing about Usury Law, wherein, there is a certain limit on the interest rates the banks and other financial institutions may legally impose on their customers when they apply for a loan such as credit card purchases. Banks such as Citibank were about to close business when at that time. It was fortunate (for the banks) at that time, that North Dakota has decided to do away with the Usury Law and financial institutions there may assign interest rates unrestricted by the government. This triggered the banks to relocate their main business hub from New York to North Dakota. But what ultimately triggered these banks to relocate is the court ruling called as Marquette Decision, in which the court decided that banks may assign the said unrestricted interest rates wherever said purchases have been made. This decision prompted almost every big bank to relocate to North Dakota and other states which followed suit in the laws regarding interest rates. Since then, the credit card business has never been the same. People have been enticed to get as much credit cards from different banks. Consumers have started a lifestyle of spending way more than they can actually afford.

About thirty percent of the credit card users in the country pay their bills promptly every month which prevents them from incurring interests and surcharges. From these clients, the credit card companies do not gain any profit. But from the rest of the credit card using public, the 70% of the population, these companies are most thankful for. The interest accrued by not paying the monthly bill completely, or even delinquent/ late payments make the industry profitable for these giant corporations.

As the spokesperson the association of banks has said, the credit card business is profitable since it is relatively higher risk business than most business, therefore, the returns are higher.