, ▁to ▁allow ▁lo ans ▁to ▁be ▁given ▁to ▁a ▁bro ader ▁range ▁of ▁customers , ▁with ▁a ▁broad ▁range ▁of ▁credit ▁history ). ▁▁ ▁Usually , ▁if ▁an ▁interest ▁rate ▁is ▁to ▁be ▁risk - based , ▁the ▁risk ▁prem ium ▁( or ▁amount ▁charged ▁extra ▁for ▁the ▁risk ) ▁is ▁set ▁at ▁the ▁time ▁of ▁an ▁account ▁opening . ▁However , ▁this ▁does ▁not ▁take ▁into ▁consideration ▁that ▁the ▁risk ▁of ▁a ▁bor ro wer ▁default ing ▁may ▁change ▁later ▁( and ▁in ▁fact ▁the ▁risk ▁might ▁be ▁less ). ▁▁ ▁Thus , ▁while ▁l enders ▁have ▁increased ▁credit ▁limits ▁and ▁lower ed ▁rates ▁to ▁borrow ers ▁in ▁good ▁standing , ▁reflect ing ▁the ▁decre ased ▁per ception ▁of ▁risk , ▁recently ▁l enders ▁have ▁begun ▁to ▁raise ▁rates ▁to ▁those ▁it ▁later ▁has ▁found ▁have ▁default ed ▁with ▁other ▁l enders . ▁ ▁This ▁practice ▁generally ▁only ▁happens ▁on ▁credit ▁cards , ▁which ▁are ▁one ▁of ▁the ▁only ▁forms ▁of ▁consumer ▁credit ▁to ▁have ▁an ▁adjust able ▁interest ▁rate ▁not ▁simply ▁based ▁on ▁an ▁interest ▁rate ▁index ▁but ▁on ▁the ▁perce ived ▁risk ▁of ▁the ▁customer ▁( both ▁positive ▁and ▁negative ). ▁▁ ▁Instead ▁of ▁a ▁specific ▁increase ▁in ▁the ▁risk ▁prem ium ▁charge , ▁credit ▁cards ▁often ▁change ▁their ▁interest ▁rate ▁to ▁what ▁is ▁known ▁as ▁the ▁default ▁rate . ▁This ▁rate ▁is ▁usually ▁the ▁highest ▁rate ▁charged ▁by ▁the ▁card , ▁an ▁average ▁of ▁ 2 7 . 8 %. ▁In ▁addition ▁this ▁is ▁charged ▁in ▁a ▁first