Credit cards are charging more 'excess' interest than ever, consumer watchdog says

[BumRushDaShow]

Source: NBC News

Feb. 22, 2024, 2:26 PM EST


Credit card companies are hiking rates to record highs to pad their profits, according to a government report released Thursday.

The share of annual percentage rates (APR) that reflects what card companies charge beyond their own lending costs has nearly doubled in the last decade, an analysis by the Consumer Financial Protection Bureau finds. That cost borrowers an estimated $25 billion in 2023 alone, the watchdog agency said.

The average credit card APR has swelled from 22.8% in 2023 to about 12.9% in late 2013, according to the bureau. Those rates are at their highest level since the Federal Reserve started gathering data, and so are the profit margins credit card companies have generated from them.

The average APR margin — the share of interest rates card issuers charge beyond the “prime” rate, which generally covers their basic funding costs — has climbed to 14.3%, from 9.6% a decade ago, the CFPB report said.

Read more: https://www.nbcnews.com/business/consumer/credit-card-interest-rates-apr-cfpb-report-rcna139866

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Link to CFPB REPORT - Credit card interest rate margins at all-time high

[Lovie777]

1. That they are.....................

[OAITW r.2.0]

2. Got a letter today from a Mastercard affiliate.

My $6500.00 line of credit will be slashed to $2200.00 if I don't use the card before end of March. I'm thinking of buying a Starlink subscription soon, so I'll probably use this card and pay in full within 30 days. That should keep my card limit intact.

[SouthernDem4ever]

4. If they lower your limit it may lower your credit rating if you use it

cute game the have going there.

[OAITW r.2.0]

6. Use it or don't use it?

I have a pretty good score now, but I can bet that a reduction in credit limit could negatively affect my score.

[SouthernDem4ever]

7. What I have noticed

The credit bureau assesses my balances every month. The score increases with the lower percentage of use compared to available credit. I assume if they start lowering my available credit in any accounts it will affect my score negatively because the amount of available credit is reduced.

[Grins]

3. "Climbed to 14%"? Please...

From Bank of America’s website:

“After (15 months) your APR will be 18.24% to 28.24%, based on your creditworthiness, when you open your account. This APR will vary with the market based on the Prime Rate.”

Recently I got one of those unsolicited offers in the mail. Their rate? 34%!

Eff them all.

[dalton99a]

10. Crappy writing/editing

The government report says:

Over the last 10 years, average APR on credit cards assessed interest have almost doubled from 12.9 percent in late 2013 to 22.8 percent in 2023 — the highest level recorded since the Federal Reserve began collecting this data in 1994.

https://www.consumerfinance.gov/about-us/blog/credit-card-interest-rate-margins-at-all-time-high/

The above article:

The average credit card APR has swelled from 22.8% in 2023 to about 12.9% in late 2013, according to the bureau. Those rates are at their highest level since the Federal Reserve started gathering data, and so are the profit margins credit card companies have generated from them.

[Midnight Writer]

5. They will keep bleeding us, more and more, until they are stopped. Why wouldn't they?

[dalton99a]

8. Kick