Why Is This Price Gouging 835

No it's not. The economy is all about the production and distribution of goods and services, just like always.

It's not clear to me that this actually happens a lot in banking. Banking is pretty compebreastive, so interest rates on borrowed money are probably equivalent to the return on an average investment, after accounting for the risk of default.

Finding someone who is desperate enough to pay a ridiculous rate on borrowed money, and lending them money at that rate, is called "loan sharking", not "banking". It's just like price gouging, and is illegal where I live.

I think that giving credit cards with high rates to people with bad credit is usury, although many others disagree. In any case, it isn't the same as price gouging, because the rate is still "reasonable" after factoring in the risk of default. Many people dislike this sort of usury, because it does trade on people's weaknesses and leaves the customer worse off. Unfortunately, usury *does* happen a lot in our economy, and isn't illegal in most cases.

To distinguish between gouging and usury, I suggest this simple rule: It's usury if the customers are "suckers", and gouging if they are "victims".