Large banks offer bad deals on credit cards, including rates and fees; smaller banks, credit union cards cost less, CFPB finds

Large banks are offering worse credit card terms and interest rates than small banks and credit unions, regardless of credit risk, and the 25 largest credit card issuers charged interest rates eight to 10 percentage points higher than the smaller institutions, the federal consumer financial protection agency said Friday.

Reacting on the results of its “Terms of Credit Card Plans” survey, the Consumer Financial Protection Bureau (CFPB) said it would be accelerating its efforts to ensure that consumers can “access better rates that can save families billions of dollars per year.”

The bureau said the survey results include information on all general-purpose credit cards of the largest 25 credit card issuers in the United States. The data also include a representative sample of products from small- and medium-sized banks and credit unions across the country, the agency said.

The CFPB said key findings from the results include: large issuers offered worse rates across credit scores (regardless if the scores were poor, good, or great); 15 issuers reported credit cards with interest rates more than 30% (with nine of the largest issuers reporting at least one product with a maximum purchase annual percentage rate [APR] more than 30%); and large issuers more likely to charge annual fees (with 27% carrying an annual fee, compared to just 9.5% of small firms, and the average annual fee at $157 for the largest issuers, as opposed to $94 for smaller issuers).

CFPB Report Finds Large Banks Charge Higher Credit Card Interest Rates than Small Banks and Credit Unions