(MONEY Magazine) – The lowest-rate credit cards have long come from banks in Arkansas, where state usury laws held rates to no more than five percentage points above the federal discount rate, or 6.5% today. In October, a federal court struck down that law, giving banks the freedom to raise rates. Pulaski Bank & Trust, which currently charges a fixed 6.5%, the second lowest rate in the nation (see page 119), has not yet made a change. "We're still looking at the market and competition," says vice president of retail and marketing Adam Mitchell. Simmons First National Bank has taken advantage of the ruling, hiking its rate to 8.95%. And CardTrak editor Robert McKinley expects others to do the same--within limits. "These banks show up at the top of all of the lists," he says, "and I imagine they don't want to fall off."

--MAYA JACKSON