Last year, we reported that Americans paid over $120 billion annually in interest and fees on credit cards. Since that time, average interest rates charged by credit card companies have quickly increased. It’s critical that consumers can find and switch to credit cards with the lowest and most competitive rates. That’s why we’ve been carefully examining barriers to a fair and competitive credit card market, especially as it relates to the role of consumer credit reporting.
In 2020, the CFPB noted that the largest credit card companies started to deliberately suppress their customers’ actual payment amounts from the nationwide consumer reporting system. Actual payments are the amount a borrower repays each month, as opposed to the minimum payment or balance. Credit card companies’ failure to report actual payment data means that millions of people’s credit reports are missing fundamental information about their credit card repayment behavior that could help many of them receive better financial offers and potentially save billions of dollars in interest expenses.
The majority of accounts, or “tradelines,” listed in credit reports are credit and retail cards, which amount to nearly 70 percent of all tradelines shared (or “furnished”) into the nationwide consumer reporting system. When the largest credit card companies suppress any piece of a consumer’s credit history, it has the potential to negatively impact consumers and the credit market at large.