Consumer Financial Protection Bureau, February 16, 2024, CFPB Report Finds Large Banks Charge Higher Credit Card Interest Rates than Small Banks and Credit Unions
The Consumer Financial Protection Bureau reported on the first set of results from the newly updated Terms of Credit Card Plans survey. The survey data reveal that large banks are offering worse credit card terms and interest rates than small banks and credit unions, regardless of credit risk. In fact, the 25 largest credit card issuers charged customers interest rates of 8 to 10 points higher than small- and medium-sized banks and credit unions. This difference can translate to $400 to $500 in additional annual interest for the average cardholder.
The newly updated Terms of Credit Card Products survey is one part of the CFPB’s efforts to increase competition throughout the credit card market. The CFPB is promoting switching through open banking, scrutinizing bait-and-switch tactics on credit card rewards, closing loopholes that allow credit card issuers to extract junk fees, and promoting credit card comparison shopping.
