WASHINGTON— The Consumer Financial Protection Bureau (CFPB) has launched what it said is an improved survey of credit card issuers and which is designed to help consumers and families compare interest rates and other features when shopping for a new credit card.
According to the Bureau, Americans pay $120 billion in credit card interest and fees each year, which contributes to the almost trillion dollars in nationwide household credit card debt.
“In the current high-rate environment, it is important for Americans to be able to accurately compare products,” the CFPB said. “Upgrades to the CFPB’s terms of credit card plans survey are designed to increase price competition in the credit card market by allowing people to comparison shop for the best prices and products.”
Goal to Help Smaller Issuers
The survey will also help smaller credit card issuers, who often offer the lowest rates, reach comparison shoppers, the CFPB said.
In addition, the Bureau said the improvements to its semiannual terms of credit card plans survey are intended to create a neutral data source to help consumers find the best interest rates and products.
“Currently, consumers can run into many obstacles when shopping for credit cards, including that many big issuers make it difficult for consumers to estimate the interest rate they will pay,” the CFPB said. “The data from the survey also can power digital tools and websites that people can use to find the best products for them, regardless of company size or marketing budget.”
Basis for Data
For the terms of credit card plans survey, the CFPB said it collects and makes public the product data on credit cards from the largest 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 comparison shopping for a credit card,” the CFPB said. “The survey will also expand the number of issuers included. Specifically, financial institutions that are not part of the top 25 nor are part of the 125 sampled issuers will be able to voluntarily submit information about their credit card products.”
Beginning this week, the Bureau noted credit card issuers will start reporting more details on the types of credit card plans they offer.
The Updates
According to the CFPB, the refresh of its terms of credit card plans survey includes updates that will help consumers easily identify:
- Lower interest rates. “With credit card interest rates rising above 20% in 2023, even small percentage changes can have outsized effects on household finances. While financial institutions with relationship banking models often offer lower credit card interest rates, they can also struggle to compete with larger issuers. The changes to the CFPB’s survey will provide them the opportunity to share more information to consumers about their credit card offerings and allow them to compete with bigger players.”
- Realistic interest rates. “The survey will ask additional questions about a credit card’s annual percentage rate (APR). If a card’s APR varies by credit score, issuers will need to report the minimum and maximum APR offered, as well as the median APR offered by certain credit score tiers. People often have a general idea of their credit scores, so seeing the median APR for their range will allow them to better compare APRs across products and estimate the potential cost of borrowing before they apply.”
- Credit card products that best fit consumer needs. “The top 25 credit card issuers will have to answer questions for all their credit cards instead of just their most popular products. All other institutions will be able to voluntarily submit information about multiple products. Questions will also expand the amount of information gathered about each card. For example, there is a new question on whether the product is a secured card or requires a deposit for account opening. There are also questions about promotional terms of balance transfers, introductory rates, and cash advances.”
For more info, go here.
It’s Called Fresh for a Reason. And We Offer Home Delivery. For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com