WASHINGTON DC – Today, the Consumer Financial Protection Bureau (CFPB) launched an enhanced credit card issuer survey that can help consumers and families compare interest rates and other features when shopping for a new credit card. Americans pay $120 billion in interest and credit card fees each year, which accounts for nearly a trillion dollars in household credit card debt nationwide. In today’s high-level environment, it’s important for Americans to be able to accurately compare products. The upgrade to the CFPB credit card plan’s survey requirements is designed to increase price competition in the credit card market by allowing people to compare stores with the best prices and products. The survey will also help smaller credit card issuers, which often offer the lowest rates, reach comparison buyers.
“In light of rising interest rates, CFPB has modernized the way it collects credit card data to spur competition and help families use products at lower rates and fees,” said CFPB Director Rohit Chopra. “This upgrade will also give smaller relationship banks another way offering better terms and services to compete with the dominant credit card companies.”
Enhancements to the CFPB semiannual credit card plans survey are intended to create a neutral data source to help consumers find the best interest rates and products. Currently there are many obstacles faced by consumers when shopping for credit cards, including many large issuers which make it difficult for consumers to estimate the interest rate they will pay. Data from surveys can also power the digital tools and websites that people can use to find the best products for them, regardless of company size or marketing budget.
For credit card plan survey requirements, CFPB collects and publishes credit card product data from the top 25 issuers and from a sample of at least 125 additional issuers. The goal of the refreshed survey is to provide people with more realistic and practical information to use when comparing credit card shopping. The survey will also expand the number of issuers included. In particular, financial institutions that are not part of the top 25 or part of the 125 sample issuers will be able to voluntarily submit information about their credit card products.
Starting this week, credit card issuers will begin reporting more details about the types of credit card plans they offer. The CFPB credit card requirements survey refresh includes updates that will help consumers easily identify:
- Lower interest rates: With credit card interest rates rising above 20% by 2023, even small percentage changes can have a big impact on household finances. While financial institutions with a relationship banking model often offer lower credit card interest rates, they also find it difficult to compete with larger issuers. Changes to the CFPB survey will give them the opportunity to share more information with consumers about their credit card offerings and allow them to compete with larger players.
- Realistic interest rates: The survey will ask additional questions about the credit card’s annual percentage rate (APR). If a card’s APR varies by credit score, the issuer must report the minimum and maximum APR offered, as well as the median APR offered by a particular credit score tier. People often have a general idea of their credit score, so seeing the average APR for their range will allow them to better compare APRs across products and estimate the potential cost of a loan before applying.
- Credit card products that best 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 will be able to voluntarily submit information about some products. Questions will also expand the amount of information collected about each card. For example, there is a new question whether the product is a guaranteed card or requires a deposit for account opening. There are also questions about the terms of the balance transfer promotion, introductory rates and advances.
The Credit Card Disclosure and Fair Fees Act of 1988 required semi-annual data collection from the 25 largest credit card issuers and at least 125 additional institutions in a manner that ensured fair geographic distribution in the sample and representation of a wide spectrum. institution. The semi-annual credit card plan survey results are a key tool for facilitating credit card shopping by consumers and for increasing competition.
For more information about surveys, visit the credit card plan requirements survey website.
Consumers can raise complaints about financial products or services by visiting the CFPB website or by calling (855) 411-CFPB (2372).
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer financial markets work by making rules more effective, by enforcing those rules consistently and fairly, and by empowering consumers to take more control of their economic lives. For more information, visit www.consumerfinance.gov.