There's solid reasoning behind those high rates though. Financial institutions justify elevated credit-card rates as compensation for unsecured lending risk—when there's no collateral backing the loan and no safety net to fall back on, the lender bears considerably more exposure. That's precisely why unsecured debt carries a premium compared to secured alternatives.
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There's solid reasoning behind those high rates though. Financial institutions justify elevated credit-card rates as compensation for unsecured lending risk—when there's no collateral backing the loan and no safety net to fall back on, the lender bears considerably more exposure. That's precisely why unsecured debt carries a premium compared to secured alternatives.