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Credit cards have not lost popularity since their first debut in the 1920s. However, we all know that credit in that era lead to big debt problems in the Great Depression. Even though modern times and credit cards have changed over the years, credit card interest rates can still cause great depressions on a smaller scale especially with credit card deregulation.

The credit card companies are desperate for money. Last year alone, almost eight billion credit card offers were mailed to American households. These solicitations included promising incentives such as frequent-flier miles, zero percent annual percentage rates (APRs), cash-back, etc. What most of us do not realize is that these teaser promotions along with credit card deregulation can severely damage credit scores. According to Demos, a non-partisan public research center, the majority of people who become victims of credit card deregulation fall under these four groups: low-income families, minorities (mainly African Americans and Latinos) and single women.

Almost all of the top ten credit card distributors have the legal right to change a person’s APR whenever and for a multitude of reasons. A missed or late payment, whether it is minutes or days late, can cause a person’s interest to climb significantly on that particular card and others as well. Of course all APRs are subject to increase or decrease as indexes change, but many of these penalty increases are appalling. The average interest rate penalty is 24.51%, a considerable increase from the initial zero percent offered. Many credit card companies are using the profits from lower income families, minorities and single women to cover the costs of benefits and rewards for consumers with more money, thus placing high interest rates and disproportionate fees on these groups of people.

With this known, two questions stand: why are credit card companies allowed to do this and how can we prevent it from going farther? About 30 years ago the Supreme Court ruled that banks could charge the interest rates of the states in which the main headquarters resided to consumers outside of that state. So, Banks began moving their headquarters to states where interest rates were very high or had no limits. Then in 1990s, fees were defined as types of “interest”, thereby allowing fees to be included in the former interest rate ruling. Hence, both interest rates and fees are allowed to climb to such high percentages. Unless the Supreme Court decides to review their former rulings, there is not much we, as consumers, can do to stop them. But, there are ways to work around the system.

If you relate to any of the four groups mentioned, make sure that you do not pounce on the first offer that looks good when applying for a credit card. It might be a teaser that could cost you hundreds of thousands of dollars in unnecessary interest. Remember, the credit card companies want your money and will do almost anything to get it. If you decide on a variable rate, keep close track of indexes and margins. Do not miss or be late on any payments. These not only can skyrocket your interest rates, but can also damage your credit score and make attaining good loans with low interest rates incredibly difficult. If you are stuck, try talking with your creditors or seek credit counseling. Keep in mind that there is always a financial solution to your credit problems.