CFPB: Credit card APRs almost doubled in past decade

The Consumer Financial Protection Bureau on Thursday took another shot at the credit card industry, saying that the Annual Percentage Rate (APR) on credit cards has almost doubled over the past decade, making the cards extremely expensive for consumers and highly profitable for financial institutions.

“By some measures, credit cards have never been this expensive,” the agency said in a new industry analysis. “Higher APR margins have allowed credit card companies to generate returns that are significantly higher than other bank activities.”

Coupled with a report last week comparing large and small institutions’ credit card interest rates, the CFPB appears to be building a case for its credit card late fee final rule. As originally proposed, the rule had most credit card late fees capped at $8; it is unclear whether the final rule will do the same.

Credit union and banking trade groups objected to the proposed rule, saying that the proposed late fee would be unreasonably low and could limit the availability of credit for individuals with less-than-stellar credit reports.


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