Water Cooler Talk

Missing the point on credit card APR margins

Credit card interest rate margins have risen due to multiple factors, including the growth in subprime accounts, the shift to upfront pricing, and the increase in revolving accounts. The Consumer Financial Protection Bureau (CFPB) blames anti-competitive pricing behavior for excessive APR margins, but the root causes of the development suggest a well-functioning and competitive industry expanding access to affordable credit.

Jenn Day
Mar 6, 2024

Read the original ABA Banking Journal article here.

Here is a brief summary of the article:

  • Credit card interest rate margins have increased in recent years.
  • The CFPB blames anti-competitive pricing behavior for excessive APR margins.
  • The widening APR margin is driven by the growth in subprime account volume, the shift to upfront pricing, and the increase in revolving accounts.
  • The growth in the credit card market indicates a competitive industry expanding access to affordable and sustainable credit.
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