Upgrades to a survey of credit card terms designed to increase price competition among the cards by allowing consumers to comparison shop for the best prices and products were announced Tuesday by the federal consumer financial protection agency.
The survey – conducted by the Consumer Financial Protection Bureau (CFPB) under the Fair Credit and Charge Card Disclosure Act of 1988 – generates data that the agency says can “power digital tools and websites that people can use to find the best products for them, regardless of company size or marketing budget.”
The 1988 law requires the semi-annual collection of data from the largest 25 issuers of credit cards and at least 125 additional institutions. The law, CFPB, says the data is to be collected “in a manner that ensures equitable geographic distribution within the sample and representation of a wide spectrum of institutions.”
“The goal of the refreshed survey is to provide people with more realistic and practical information to use when comparison shopping for a credit card,” CFPB said in a release. “The survey will also expand the number of issuers included. Specifically, financial institutions that are not part of the top 25 nor are part of the 125 sampled issuers will be able to voluntarily submit information about their credit card products.”
Credit card issuers will start reporting this week about more details on the types of credit card plans they offer, the bureau said.
The bureau said changes included in the survey are:
- Opportunity for smaller providers to share more information, particularly about lower interest rates, to consumers about their credit card offerings and allow them to compete with bigger players.
- Additional questions about a credit card’s annual percentage rate (APR). “If a card’s APR varies by credit score, issuers will need to report the minimum and maximum APR offered, as well as the median APR offered by certain credit score tiers,” CFPB said. “People often have a general idea of their credit scores, so seeing the median APR for their range will allow them to better compare APRs across products and estimate the potential cost of borrowing before they apply.”
- The top 25 credit card issuers will have to answer questions for all their credit cards instead of just their most popular products. All other institutions will be able to voluntarily submit information about multiple products, the bureau said. “Questions will also expand the amount of information gathered about each card. For example, there is a new question on whether the product is a secured card or requires a deposit for account opening. There are also questions about promotional terms of balance transfers, introductory rates, and cash advances.”
CFPB Enhances Tool to Promote Competition and Comparison Shopping in Credit Card Market