The Consumer Financial Protection Bureau (CFPB) has launched a new tool, Explore Credit Cards, to help consumers make informed decisions about credit cards. The tool provides unbiased data on over 500 credit card options, allowing users to compare and contrast their features.
According to the CFPB, some credit card companies engage in deceptive practices, such as devaluing rewards points, making it difficult to redeem them, or using fine print to cancel earned rewards. The agency also criticized credit card issuers for offering extremely high interest rates and late fees on retail cards.
To combat these issues, the Explore Credit Cards tool offers a range of features, including:
* Comparison by credit score range
* Interest rate comparisons
* Fees analysis
* Rewards offerings comparison
The CFPB hopes that this tool will promote competition among credit card issuers, allowing smaller providers to compete with larger ones. By providing consumers with access to transparent and unbiased data, the agency aims to help them make more informed decisions about their credit card options.
A recent study by the CFPB found that the 25 largest credit card issuers charge interest rates 8-10 percentage points higher than smaller banks and credit unions. This can result in significant cost savings for consumers, with estimates suggesting an average annual savings of $400 to $500 per year.
The agency also warns about the risks of private label cards, which often have fixed APRs that apply to all cardholders, regardless of their creditworthiness. In December, the top retailers’ private label cards had an average APR of 32.66%.
By using the Explore Credit Cards tool, consumers can take steps to protect themselves from deceptive credit card practices and make more informed decisions about their financial options.
Source: https://eu.usatoday.com/story/money/personalfinance/2024/12/18/cfpb-tool-pick-credit-card-rewards-scams/77057952007