From CNBC: 2024-12-03 07:00:01

Banks raised credit card interest rates and fees in response to a regulation that may never happen, impacting consumers with higher costs. Synchrony and Bread Financial raised APRs by 3-5 percentage points and introduced paper statement fees. Proposed CFPB rule aiming to save consumers money resulted in increased borrowing costs.

Synchrony and Bread Financial implemented changes like APR increases and paper statement fees in anticipation of a CFPB rule that may not materialize. The surge in borrowing costs will hit consumers with lower credit scores, who may turn to co-branded cards to avoid penalties. Larger banks like Barclays and Citigroup also raised rates on their cards.

CFPB introduced a rule to cap late fees at $8 per incident, aiming to save consumers $10 billion annually. Banks argue late fees are necessary deterrents to default and sued to halt the rule. Card users already face higher borrowing costs and fees due to the regulation, impacting holiday spending and accumulating debts.

Read more: Banks raise costs in response to CFPB rule