Before opening a new line of credit, check this restriction

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When you apply for a new credit card or decide to take out a loan, you read the fine print, or at least you’re supposed to read the fine print. You probably check the interest rate and fee schedule, then let your eyes settle on the rest.

But before you sign on the next dotted line, you might want to run a quick CTRL+F for a key term in your loan agreement: “Iowa.”

Yeah, the state. It turns out that Iowa has some of the strongest consumer protection laws when it comes to loans and credit.

The state’s 70-page consumer credit code is partly due to what a Reddit user described as “our badass attorney general” Tom Miller. This guy was Iowa’s attorney general from 1979 to 1991, then from 1995 to Actually at present. The State Enacted Consumer-Friendly Lending Laws Long Before It Was Cool during the last recession.

So if you see a loan or credit agreement that says the offer isn’t available in Iowa, that means there’s something in that fine print that doesn’t meet consumer protection laws. from Iowa.

A quick overview of some highlights:

Iowa has strict limits on payday loans, according to the Monks Register.

For example, lenders cannot loan more than $500 to one person at a time. They also cannot charge more than $15 on the first $100 lent, and then no more than $10 for each additional $100.

In 2007, Iowa placed an interest rate cap of 21% on car title loans to avoid predatory APRs on these short-term loans.

And added more recently, Iowa imposes strict caps on late fees for installment agreements and hire-purchase contracts. It also limits service charges for loans to no more than $30.

The rules are so strict, explained William Charles to credit doctor, which some financial institutions do not want to lend to Iowa residents.

Due to the strength of laws in Iowa, customers are not as profitable for card issuers. Most take it on the chin, but some decided to ban residents in protest.

Charles wrote this post in 2014, when consumers couldn’t understand why Iowans couldn’t apply for the Barclay Arrival Card. (This map was recently removed.)

But there are also more recent examples. You want to pay for your Peloton or purchase in installments via To assert? You can’t, if you live in Iowa.

If a lender excludes Iowa in their fine print, that doesn’t mean they’re hiding a terrible secret about their plans to scam you. It just means that their terms aren’t as user-friendly as Iowa’s super stringent requirements.

Finding that little word in a loan agreement should inspire you to give the document another read before signing. Understanding the terms of engagement now can save you headaches later.

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