Big banks used “greedflation” tactics to double APRs over the last decade
Today, the Consumer Financial Protection Bureau released a new analysis that shows credit card issuers have hiked APR margins to record highs since the Federal Reserve began collecting data in 1994. These APRs are much higher than interest rates set by the Federal Reserve and are being issued despite a less risky borrower pool. This profiteering has cost people with credit card debt hundreds of dollars in extra interest costs each year as credit card debt hits a record $1.13 trillion. Groundwork Collaborative Executive Director Lindsay Owens reacted with the following statement:
“Inflation has been great for credit card companies, as Visa’s CEO loves to remind investors. But never one to leave well enough alone, they are blowing right past the prime rate, despite a less risky borrower pool, bringing in all-time high margins.”
This report builds on research published last week that shows large banks charge customers higher interest rates on their credit cards than smaller institutions, regardless of credit risk.
Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about greedflation and what it means for our economy.