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Why Credit Card Interest Rates Are So High - Itamar Drechsler interviewed on Odd Lots
Nov 28, 2025 #Bloomberg #Podcast
Some people pay off their credit cards at the end of each month. They use the cards as a payment method and collect points and rewards, and never have to pay any interest. For other users, interest can be sky high — way higher than what would be expected simply based on a user's credit or default risk. So why is this? And how do credit card companies get away with charging interest at these levels? On this episode of Odd Lots, we speak with Itamar Dreschsler, a finance professor at Wharton, who recently co-authored a piece titled Why Are Credit Card Rates so High? Drechsler walks us through the costs of running a credit card operation, and explains what borrowers are really paying for.
Some people pay off their credit cards at the end of each month. They use the cards as a payment method and collect points and rewards, and never have to pay any interest. For other users, interest can be sky high — way higher than what would be expected simply based on a user's credit or default risk. So why is this? And how do credit card companies get away with charging interest at these levels? On this episode of Odd Lots, we speak with Itamar Dreschsler, a finance professor at Wharton, who recently co-authored a piece titled Why Are Credit Card Rates so High? Drechsler walks us through the costs of running a credit card operation, and explains what borrowers are really paying for.
Transcript