The Consumer Financial Protection Bureau (CFPB) has taken major actions to protect consumers from unfair credit card practices. The agency warned companies against devaluing rewards points and other unlawful practices, highlighted issues with retail credit cards, and launched a tool to help consumers find better interest rates.
Retail credit cards, which typically offer store-specific rewards and loyalty programs, charge significantly higher interest rates than traditional cards. The CFPB found that over 90% of general-purpose credit card spending occurred on rewards cards in the past year, with companies promising cashback bonuses or free round-trip airfares to consumers.
To combat these practices, the CFPB has:
– Warned companies against devaluing earned rewards and other unfair tactics
– Issued a report highlighting issues with credit card rewards programs
– Launched Explore Credit Cards, an unbiased tool that provides comprehensive data for over 500 cards
The tool allows consumers to make apples-to-apples comparisons of options in the credit card market, using open data. This addresses a lack of price competition and enables consumers to find better rates.
Consumers can submit complaints about financial products and services by visiting consumerfinance.gov/complaint or calling (855) 411-CFPB (2372). The CFPB also invites voluntary data submissions from smaller issuers to promote their credit products in the market.
Source: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-on-bait-and-switch-credit-card-rewards-tactics