Why Don't Credit Card Rates Fall When Banks' Money Gets Cheaper?

Since 1995 the prime rate, the benchmark card rates are set from, fell from a high of nine percent to a low of three percent in 2021, yet card rates stayed relatively high. This video follows the paper trail from Lawrence Ausubel's 1991 American Economic Review article on sticky card rates to the CFPB's 2024 finding that the APR margin over prime reached an all-time high, despite lower charge-off rates, and to the eight to ten point rate gap it found between the largest and smaller issuers. Educational only, not financial advice.