CFPB Report: Consumers Charged Record-High $130 Billion in Credit Card Interest and Fees in 2022

credit cardImage by Zhu Wei

The Consumer Financial Protection Bureau (CFPB) recently revealed in its biennial report to Congress that credit card companies charged consumers over $105 billion in interest and more than $25 billion in fees last year. This led to a record-high total of $130 billion in charges. The report also highlighted that total outstanding credit card debt surpassed $1 trillion for the first time since the CFPB began collecting this information.

Key takeaways from the report include:

  • High credit card company profits: Major credit card companies’ profits are now higher than pre-pandemic levels, indicating a potential lack of competition in the market.
  • Rising annual percentage rates (APRs): Credit card companies continue to set interest rates far above major indexes like the federal funds target rate, with an average APR margin of 15.4 percentage points above the prime rate last year.
  • Record-breaking charges: Consumers were charged the highest amount of interest and fees ever measured by the CFPB’s data.
  • Increase in late fees: Consumers were charged $14.5 billion in late fees, returning to pre-pandemic levels.
  • Record-breaking credit card debt: The CFPB’s data showed credit card debt at the end of 2022 surpassed $1 trillion for the first time.
  • More borrowers caught in debt: A greater number of cardholders are carrying balances month to month or falling behind on payments.

“Last year, Americans paid $130 billion in interest and fees on their credit cards,” said CFPB Director Rohit Chopra. “With credit card debt crossing the trillion-dollar mark, we will be working to prevent bait-and-switch tactics when it comes to rewards and to increase refinancing activity so consumers can get lower rates.”

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The report also pointed out the increasing shift toward digital communication, with consumers increasingly using digital portals to manage their cards and make payments. Nearly 80% of cardholders are enrolled in their card’s mobile app, with adoption rates even higher for consumers under 65.

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