Information about a card issuer’s typical practices would also be helpful, Ms. But an ideal comparison tool, she said, would allow consumers to compare a true “effective” interest rate that reflects the card’s rate along with the impact of any fees, like annual fees, late fees, balance transfer fees and cash advance fees. “Certainly, it’s helpful to have that information from an unbiased source,” said Chi Chi Wu, senior staff attorney with the National Consumer Law Center. The association also asked the bureau to “explain its apparent ambition to create a C.F.P.B.-run credit card comparison platform with sufficient detail to allow commenters to evaluate such a proposal.”Ĭonsumer advocates say that the idea of a bureau-run comparison tool is promising but that the specifics remain to be seen. The American Bankers Association asked the agency in a March 13 letter to give up its current plan and start over. But banks are resisting the bureau’s new approach, calling it too vague. The bureau’s move is part of its effort to promote consumer-friendly card practices, like lower fees for late payments. The sites can be useful, he said, as long as consumers understand the limitations. “Comparison sites only show products with which they have an economic relationship,” said David Silberman, a senior fellow at the nonprofit Center for Responsible Lending. (Most sites disclose this.) Offerings from smaller banks and credit unions, which may charge lower rates, may not be included. But the sites often work with a relatively narrow range of large issuers, consumer advocates say, and earn fees when shoppers apply for a card. More than a dozen commercial websites already offer credit card comparison tools. Banks are also being asked about the terms of balance transfers, introductory interest rates and cash advances.
The bureau is seeking more information about each card - asking, for instance, if it is a “secured” credit card, which requires a security deposit to establish a credit limit and is often used by people with limited credit histories or low credit scores. The bureau is also encouraging any bank - in addition to those in the survey - to submit information so consumers are aware of its offerings. The other banks are being asked to “voluntarily” submit information about other cards. Now, the 25 biggest card issuers have to answer questions about all of their credit cards, not just their most popular offerings. (Credit scores are three-digit numbers that summarize your credit history higher is better.) People often have a general idea of what their credit score is, the bureau said, so seeing the typical score for their range will let them better compare rates across different cards and estimate the potential cost of borrowing.
for scores of 619 or under, for 620 to 719 and for 720 and above. If a card’s rate depends on the applicant’s credit score - as most do - banks must report the lowest and highest rates charged, as well as the median A.P.R. Under the bureau’s new approach, banks are asked more questions about a card’s terms, like its interest rate, known as the annual percentage rate, or A.P.R. And the information isn’t necessarily easy for consumers to use. (It inherited the survey task under a decades-old law.) But banks supply information on just their most popular cards.
BEST COMPARE CREDIT CARDS PLUS
The bureau already collects information twice a year from the largest 25 credit card issuers, plus a sample of at least 125 other issuers to capture a range of banks throughout the country, and posts that information online. With interest rates rising, the bureau has “modernized” how it gathers data from card companies “to spur competition and help families use products with lower rates and fees,” the agency’s director, Rohit Chopra, said in a statement in March.
The Consumer Financial Protection Bureau said it had started asking big banks for more details about typical interest rates for people with certain credit scores so shoppers could get a better idea of whether they would qualify for a card and what interest rate they would pay. Consumers may soon have an online tool from the federal government that is aimed at making it easier to comparison shop for credit cards.
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