CFPB’s Biennial Credit Card Report Finds Consumers Paid More than $130 Billion in Interest and Fees in 2022
Recently, the Consumer Financial Protection Bureau (CFPB) released its biennial report on the consumer credit card market to Congress, which found that credit card companies charged consumers over $105 billion in interest and more than $25 billion in fees in 2022. Other areas of concern include more consumers carrying debt month to month while others fell into deeper debt over time, but credit card company profits remained above pre-pandemic levels.
“Last year, Americans paid $130 billion in interest and fees on their credit cards,” said CFPB Director Rohit Chopra. “With credit card debt crossing the trillion dollar mark, we will be working to prevent bait-and-switch tactics when it comes to rewards and to increase refinancing activity so consumers can get lower rates.”
Consumers paid $14.5 billion in late fees in 2022, up from $11.3 billion in 2021. Payments Dive noted that in February, the CFPB released a proposal to ban credit card late fees from being more than 25 percent of the minimum payment, and to cap the fees at $8. The proposal received nearly 220 comments from banks, credit unions, consumer finance organizations, and individuals.
The CFPB regularly reviews developments in the credit card market under the Credit Card Accountability Responsibility and Disclosure (CARD) Act. The Bureau found that annual percentage rates (APRs) have continued to increase above the cost of offering credit, with an average APR margin of 15.4 percentage points above 2022’s prime rate.
The CFPB also found that consumers with revolving balances were charged more in fees and interest than they earned in rewards. Consumers who carried debt month to month paid 94 percent of total interest and fees, but only earned 27 percent of rewards at major credit card companies.