The CFPB explained that this search tool, available on its website (consumerfinance.gov), was introduced to crack down on illegal practices related to credit cards and to help consumers save on interest rates and fees.
Named Explore Credit Cards, the tool is designed to allow users to compare the benefits of over 500 credit cards at a glance. Users can input their credit score and location, and then select the purpose for which they intend to use the credit card. Based on this information, the tool generates relevant search results.
The results are sorted in order of the lowest Annual Percentage Rate (APR) and provide details such as card issuer benefits, annual fees, and types of rewards. Since the website is operated by a federal agency, it does not feature advertisements and only displays data submitted by credit card companies.
The CFPB criticized existing credit card comparison websites for operating with commercial intent, such as displaying certain credit cards prominently based on advertising fees or receiving rebates for applications made through their platforms. In contrast, Explore Credit Cards is designed to enable fair comparisons, according to the CFPB.
The agency noted that credit card companies have engaged in deceptive practices such as false advertising, devaluing rewards, and failing to provide promised benefits, causing harm to consumers. It emphasized that Explore Credit Cards would serve as a crucial tool to address such issues.
CFPB Director Rohit Chopra stated, “Large credit card issuers too often play a shell game to lure people into high-cost cards, boosting their own profits while denying consumers the rewards they’ve earned.”
The CFPB revealed that some credit card companies had been found to devalue rewards points earned by consumers, abruptly reducing their worth or making redemption processes more complicated. Additionally, they were found to include ambiguous language in terms and conditions, allowing them to cancel or restrict earned rewards.
The agency has already taken enforcement actions against companies like American Express and Bank of America for illegal practices and announced plans to strengthen oversight going forward.
Separately, the CFPB released research findings showing that store credit cards carry significantly higher APRs compared to general credit cards. According to 2024 data, 9 out of 10 store credit cards had APRs exceeding 30%, while only 38% of general credit cards had such high rates.
The average maximum APR for store credit cards was found to be 32.66%.
BY WONHEE CHO [cho.wonhee@koreadaily.com]
