'Treadmill of debt': Consumer protection head sounds off on credit card companies' practices

Published On Dec 21, 2024, 9:31 AM

Rohit Chopra, Director of the Consumer Financial Protection Bureau, highlighted that credit card companies are significantly raising their profit margins at the expense of consumers. He noted that credit card interest rates have outpaced recent Federal Reserve interest rate hikes, leading to a situation where consumers are dealing with increased costs. Chopra criticized the industry's focus on rewards programs, which entice consumers while obscuring the impact of high-interest rates. He also suggested that there may be a need for regulations such as capping interest rates and emphasized the problematic influence of retail credit cards as they often contribute to consumer debt. Overall, he described an environment where credit cards may lead consumers onto a 'treadmill of debt.'