On February 16, 2024, the CFPB revealed, through Terms of Credit Card Plans survey, that large banks are offering higher credit card terms and interest rates than small banks and credit unions, regardless of credit risk. The CFPB found that the 25 largest credit card issuers charged customers interest rates of 8 to 10 points higher than small- and medium-sized banks and credit unions, which can translate to $400 to $500 in additional annual interest for the average cardholder.
The CFPB’s survey data include information on all general-purpose credit cards of the largest 25 credit card issuers in the US and a representative sample of products from small- and medium-sized banks and credit unions. The survey’s key findings include:
Large issuers offered worse rates across credit scores. Large issuers charge higher interest rates based on credit score. Median rates for good credit: 28.20% from large issuers, 18.15% from small issuers.
Fifteen issuers reported credit cards with interest rates above 30%. Nine top credit card issuers had products with APRs over 30%, often private label or co-branded cards sold through retail partnerships.
Large issuers were more likely to charge annual fees. Among large issuers, 27% had annual fees averaging $157, while only 9.5% of small firms had fees averaging $94.
Read the CFPB’s press release here.
The data spotlight can be found here.
