by Brett Wilkins

A report published Feb. 16 by the U.S. Consumer Financial Protection Bureau found that large banks charge customers higher credit card interest rates than smaller banks and credit unions, potentially costing consumers hundreds of dollars per year.

As required by federal law, the CFPB analyzed 643 credit cards from 156 issuers—84 banks and 72 credit unions—offered from January through June 2023 for the agency’s updated Terms of Credit Card Plans survey.

“Our analysis found that the largest credit card companies are charging substantially higher interest rates than smaller banks and credit unions,” CFPB Director Rohit Chopra said in a statement. “With over $1 trillion in credit card debt outstanding, the CFPB will be accelerating its efforts to ensure that consumers can access better rates that can save families billions of dollars per year.”


Among the report’s key findings:

  • During the first half of 2023, small banks and credit unions tended to offer cheaper interest rates than the largest 25 credit card companies across all credit score tiers;
  • The difference in reported purchase annual percentage rate (APR) between the largest and small issuers translated to average savings of $400 to $500 a year for a consumer with an average balance of $5,000 using a small bank or credit union’s card;
  • Large issuers offered worse rates across credit scores;
  • Nearly half of the largest credit card issuers reported offering cards with a maximum purchase APR over 30 percent;
  • Products offered by large issuers were three times as likely to include an annual fee than those at small institutions; and
  • The average size of annual fees for the largest issuers was approximately 70% higher than at small institutions.

“This new insight into the predatory practices deployed by big banks confirms what many customers already know: Big corporations will use any tactic they can to make an extra buck,” said Lindsay Owens, executive director of the progressive think tank and advocacy group Groundwork Collective.

“Thankfully,” Owens added, “CFPB has already stepped up to take on the credit card industry by clamping down on misleading rewards programs and working to ban the junk fees that only serve to disproportionately harm low-income people.”