Posted by William Charles on April 1, 2014
Credit Cards

Published on April 1st, 2014 | by William Charles

6

Why Are Some Credit Card Offers Not Available To Residents Of Iowa?

I’m a resident of Iowa and I wanted to apply for the Barclay Arrival card, I noticed it had the following fine print that secludes me:

This offer is available only to applicants who are residents of the United States,  with the exception of Iowa, Puerto Rico and the US territories, and may not be available if you already have or have had an account with us.”

Why do they have this rule and is there anything I can do about it?

ZBigFam from FlyerTalk

with the exception of Iowa

Thanks for the question. Barclay has similar fine print on all of their cards (although it is missing on some of their cards) in regards to Iowa not being eligible for this offer. This is because Iowa has a very robust consumer credit laws the main one being ICCC (Iowa Consumer Credit Code).

A lot of this is overlap with national laws and not of particular importance (e.g having to display interest rates and fees clearly). Because of how strong the laws are in Iowa, customers there aren’t as profitable for card issuers. Most just take this on the chin but some (like Barclay) have decided to bar residents in protest. Here are some of the main reasons why they may have chosen not to do business with Iowa residents:

  • Delinquent payment fees are capped at $15 (Arrival has a late payment fee of $35 and it causes you to default to a penalty APR rate of ~10% above your regular APR)
  • Card issuers have a period of only five years to proceed with legal action against people who have become delinquent (usually six years in other states)
  • Interest rates are capped at 12% for consumer transactions (although this doesn’t apply to credit cards, so isn’t a real reason as to why Barclay wouldn’t allow Iowa residents to apply)

This doesn’t mean you should start lobbying your states politicians to remove these laws though, they were added to provide greater protection for all consumers. What you really should be doing is asking why other states don’t have similar laws and why it’s not rolled out nationally.

Hope this answers your question! If you have a question about this topic or another, let us know in the comments or contact us.

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6 Responses to Why Are Some Credit Card Offers Not Available To Residents Of Iowa?

  1. Zack says:

    I would also love to know why this is. I know people that have Barclay’s NFL card which is also no longer available in Iowa.

  2. Jeff says:

    If other states had this law, it would result in worse product offerings from the banks (as evidence of Barclay refusing to do business in Iowa).

    So, if anything, lobby your legislatures to discourage and remove these types of laws. If the banks cannot charge a high enough fee to offset their risk, they will discontinue these awesome bonus cards. It is simple economics.

  3. YS says:

    Not sure I agree with the last comment – as regulation increases nationwide and they stop making less money off these people, they will hafta cut costs. That adds up to less benefits for us people

  4. Allan Emeritz says:

    Well, it is disappointing not to be able to get the offer, but at the same time reassuring to know that our legislators are concerned about consumer protection. It would be nice to see more states make laws like this. Not a huge fan of predatory lending anywhere.

  5. kevin says:

    I just learned something today.

  6. cm says:

    TBH, the issuers gotta make the money somehow. If we lobby to reduce the fees which we don’t pay anyways, then the issuers would have less budget for giving out rewards.

    In fact, if you take a look at credit unions as an example, you can usually see that the APR on reward cards is higher than non-reward ones. As they say — you can have 3, choose 2.

    (Not to say that we should support the issuers that bully the states into getting rid of consumer-protection laws; as always, vote with your wallet.)

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