Some of the responsibility for ensuring a competitive marketplace must be placed on borrowers themselves, since knowledgeable, informed borrowers help to foster competition in credit markets. When consumers do not know or cannot compare rates being charged by various lenders, each lender has more freedom to charge any rate — fair or unfair. A high level of borrower awareness can create a natural protection from unreasonable interest rates, in lieu of the external constraint of a usury ceiling. 1 Economic theory suggests that interest rates are best determined by the marketplace rather than by legislative mandate. In the case of credit cards, however, some felt in the early 1990s.
