There are substantial differences in the credit card offers that banks extend to different potential customers. Less-sophisticated borrowers receive offers with more back-loaded and hidden features, as well as more upfront rewards, visual distractions, and fine print at the end of the offer letter, according to Hong Ru and Antoinette Schoar in their new study, Do Credit Card Companies Screen for Behavioral Biases? (NBER Working Paper No. 22360). Banks also ratchet up these hidden features when their cost of funding increases, and when the credit risk of consumers is lower, which reduces the risk for the banks that customers default once they are hit with the unexpected charges. Hidden fees go up when state unemployment insurance benefits become more generous.
https://www.nber.org/digest/sep16/w22360.html
One more way in which Big Data is used against Little Guys.
(Score: 4, Funny) by gawdonblue on Wednesday September 07 2016, @09:47AM
That's why money flows from customers to banks - because of the potential difference.
(Score: 0) by Anonymous Coward on Wednesday September 07 2016, @12:28PM
I think it's called Ohm's Law.
(Score: 2) by davester666 on Thursday September 08 2016, @07:22AM
And the banks resist all attempts to ground them.