According to the Consumer Financial Protection Bureau’s latest release, American credit card owners have managed to avoid $16 billion in card fees thanks to the CARD Act and other tighter CFPB regulations it brings to the marketplace.
The 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act alone is credited with saving consumers $7 billion.
“The CARD Act has helped people avoid more than $16 billion in gotcha credit card fees,” said CFPB Director Richard Cordray. “The law made it easier for consumers to evaluate costs and risks by eliminating the worst back-end pricing practices in the market. There is more work to do. But with commonsense rules in place, credit cards are safer and more affordable, credit is more available and companies remain profitable with improved customer satisfaction.”
Cordray further noted that apart from paying fewer fees, consumers have also seen the price of those fees fall by approximately 20 percent over the last five or six years, since the CARD Act also requires card issuers to price their fees to be “reasonable and proportional.” He also shared that consumers have been able to save $9 billion in “over-limit” fees during that same time span, since the CARD Act also requires firms to tell consumers if they face charges for exceeding their credit limit.
However, apart from trumpeting success, the new CFPB report also points out risks to the system, particularly the expanding use of credit cards among consumers. According to the report, around 100 million accounts opened in 2014 alone. The CFPB also remains concerned about the tactics debt collection companies use to close accounts.
“Even after a consumer has been reached, they may start calling again the next day. These practices smack of harassment,” he says in his prepared remarks.
Cordray is also concerned with “deferred interest” promotions and cards pitched to lower credit score customers.