Washington DC – Today, the Consumer Financial Protection Bureau (CFPB) launched an updated survey of credit card issuers to help consumers and families compare interest rates and other features when shopping for a new credit card. Americans pay $120 billion in credit card interest and fees each year. In today’s high-end environment, it’s important for Americans to be able to compare products accurately. The changes to the CFPB’s survey of credit card plans are designed to increase price competition in the credit card market by allowing people to compare for the best rates and products. The survey helps comparison shoppers reach the smaller credit card issuers, which often offer the lowest rates.
“Given rising interest rates, the CFPB is modernizing how it collects credit card information to stimulate competition and help families use products with lower costs and fees,” said CFPB Director Rohit Chopra. “These improvements will give small relationship banks another way to compete with the major credit card companies by offering better terms and better service.”
The improvements to the CFPB’s semi-annual credit card plan survey are intended to create an independent source of information to help consumers find the best interest rates and products. Consumers today face many obstacles when purchasing credit cards, including the fact that many large issuers make it difficult for consumers to estimate the interest rate they will pay. The data from the survey can help develop digital tools and websites that people can use to find the best products for them, regardless of company size or marketing budget.
Under the terms of the Survey of Credit Card Plans, the CFPB collects and discloses product information on credit cards from a sample of the largest 25 issuers and at least 125 additional issuers. The goal of the updated survey is to give people more realistic and actionable information when shopping for a credit card. The study also expands the number of donors included. In particular, financial institutions that are not included in the top 25 or not part of the 125 sample may voluntarily provide information on their credit card products.
Starting this week, credit card issuers will begin reporting more details on the types of credit card plans they offer. The CFPB’s renewal of the terms of credit card schemes includes improvements to help consumers identify:
- Low interest rates: With credit card interest rates expected to increase by more than 20 percent by 2023, the impact of even small percentage changes on household finances can be magnified. While financial institutions with relationship banking models offer lower credit card interest rates, they may struggle to compete with larger issuers. Changes to the CFPB’s survey will allow them to share more information with consumers about their credit card offerings and compete with the bigger players.
- Real interest rates: The survey asks additional questions about credit card annual percentage rates (APR). If a card’s APR varies by credit score, issuers must report the minimum and maximum APR offered, as well as the median APR offered at certain credit score levels. People often have a rough idea of their credit score, so seeing the average APR for their region allows them to better compare APRs on products and estimate the cost of borrowing before applying.
- Credit card products that suit their needs: The top 25 credit card issuers should answer questions for all of their credit cards, not just their most popular products. All other institutions can voluntarily provide information about many products. Questions expand the amount of information collected about each card. For example, there is a new question about whether the product is a secured card or a deposit to open an account. There are also questions about promotional terms for balances, introductory rates and cash advances.
The Fair Credit and Charge Card Disclosure Act of 1988 requires semi-annual data collection from the largest 25 credit card issuers and at least 125 additional institutions. Institutions. Semi-annual credit card plans survey results are a key tool to streamline consumer credit card purchases and increase competition.
For more information on the survey, visit the Credit Card Plans Survey website.
Consumers can file complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
The Consumer Financial Protection Bureau (CFPB) is a 21st-century agency that makes consumer financial markets more efficient by making rules more effective, enforcing regulations more consistently and fairly, and giving consumers more control over their financial lives. For more information, visit www.consumerfinance.gov.
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