easy · Asset-Backed Securities asset-nuances

What is 'Interchange', and how does it affect a credit card master trust?

1. A contractual mechanism for swapping high-interest receivables for low-interest receivables already held within the pool.
2. Fees paid by merchants to the card issuer, which are often included as part of the trust's finance charge collections.
3. The process of moving a series from the revolving period into the scheduled controlled amortization period.
4. An interest rate swap arrangement between the trust and an external bank counterparty used to hedge floating-rate risk.

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