Consumer watchdog to study record-high credit card rates
By The Exchange Team
Credit cards are one of the most convenient and widely used methods of borrowing money, but they are also among the most pricey.
The Consumer Financial Protection Bureau is now investigating how much credit card interest banks charge.
With inflation soaring, customers are turning to credit cards to make ends meet, sparking a federal investigation.
Although the CFPB can't cap interest rates, banks may find it better to decrease rates than fight with the agency.
How CFPB can reduce credit card rates
Rohit Chopra applied a similar method to reduce late fees, overdraft fees, and other penalties.
If the CFPB issues a rule, it might limit APR spreads from the prime rate.
Policy may have unforeseen consequences. Limiting bank revenue could force issuers to tighten lending rules, forcing lower-income clients to lose credit card accounts.