Rate-Jacking: Risk-Based and Opportunistic Pricing in Credit Cards
Adam J. Levitin
Georgetown University Law Center
Utah Law Review, No. 2, p. 339, 2011
Georgetown Law and Economics Research Paper No. 11-28
Georgetown Public Law Research Paper No. 11-136
This Article, part of a theme-volume on the Credit C.A.R.D. Act, explores the phenomenon of credit card “rate-jacking” — the practice of card issuers suddenly raising the interest rate on an account, often applying the new rate retroactively to existing balances. This Article examines the degree to which rate-jacking — now largely prohibited by the Credit C.A.R.D. Act — and credit card pricing generally reflects risk-based or opportunistic pricing.
Number of Pages in PDF File: 30
Keywords: credit cards, Credit CARD Act, risk-based pricing, opportunistic pricing, shrouded pricing, double-cycle billing, residual interest, float, securitization, static pool, revolver, transactor
JEL Classification: K00, K12, K23Accepted Paper Series
Date posted: November 20, 2011 ; Last revised: April 25, 2012
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