- 4 min read
- The Consumer Financial Protection Bureau (CFPB) wants you to better understand your documents about credit cards.
- The CFPB receives and reviews your complaints about credit cards.
- Bills.com provides information about debt relief options for your credit card debt problems.
CFPB: Dealing with Credit Cards
Congress created the Consumer Financial Protection Bureau (CFPB) to ensure that banks and other lenders treat customers fairly. The CFPB will help to oversee the financial industry. It aims to help the consumer be informed, receive clear forms and documents from the banks and lenders, and have a place to have their complaints reviewed. The CFPB aims to accomplish its goal by Educating, Enforcing, and Studying.
The CFPB is focusing on three areas:
- Credit Card
- Student Loan
This article will explain to you about the beginning steps taken by the CFPB in the area of Credit Cards.
We all know how complicated it is to take a loan or fix a problem with the lender or bank that is servicing the loan. This is especially true after the housing meltdown of 2008 and the ensuing financial chaos. Bills.com knows that credit card debt is a huge problem for lots of people and provides many articles about credit card debt and ways to seek debt relief.
Use the Debt Coach to help you find the best solution for your debt problems.
Forms and Agreements
Almost everybody has a credit card, buys in stores, on line and takes out cash from the ATMs. However, very few are aware of the legal terms of the card, often written in documents that are long and hard to read, and written in legalese.
According to their February 2012 Congressional Report, the CFPB has taken the following steps:
- Issued a prototype credit card agreement with clear and easy language to help the consumer understand costs and prices, risks, and the terms of the card.
- Testing a prototype with the Pentagon Federal Credit Union and asking for consumer comments.
- Held a conference in February 2011 to review the Card Act (the Credit Card Accountability Responsibility and Disclosure Act). Also, review consumer data about credit cards.
The CFPB is interested in seeing that the consumer receive full information in a manner they will understand. One area that is crucial for you when shopping for a credit card is the price. When shopping for a credit card you have to compare interest rates together with a variety of fees for different types of transactions. In addition cards come with different promotional periods, annual fees, and reward programs.
In addition, the information is often published in a limited manner. Prices as expressed in APR terms have a broad range, depending on how the credit company views your riskiness. It is often the case that the consumer is not aware of all the costs and possibilities when shopping for a credit card. When shopping for a credit card you should be aware of the different company’s offers. It is always good to check each offer as explained by the credit card issuer itself.
Consumer Credit Card Complaints
The CFPB reported on credit card complaints they collected between July 21 and December 31, 2011. They collected 9,307 credit card complaints (versus 2,326 mortgage complaints). The complaints can be submitted through the CFPB Web site, telephone, fax, e-mail or referrals from other regulators.
Types of Complaints
The CFPB created different categories of credit card related issues. Here are the top ten categories, according to the CFPB report on credit card complaints for July 22 until December 21, 2011:
|Identity Theft /Embezzlement / Fraud
|APR or Interest Rate
|Closing / Cancelling Account
|Credit Card Payments / Debt Protection
|Credit Card Complaints in Top 10 categories
Source: Consumer Financial Protection Bureau
The CFPB noted that consumers had a hard time classifying the type of problem they had. The categories will be revised as time goes on, in order to have categories that are more consistent.
The Complaint Process
The CFPB not only takes in consumer's complaints but also follows through with these steps:
Get the Companies Response to the Consumer's Credit Card Complaints
According to the CFPB report:
- Approximately 9,885 or 75% of all complaints received between July 21 and December 31, 20 11 have been sent to companies for review
- Companies have responded to 88.1% of the complaints.
- Over 55% of complaints closed with relief
That means more than 55% percent of the complaints ended in some type of monetary (or equivalent) compensation.
Consumer's Review of the Companies Response
The CFPB does not stop at having the companies respond. They give the consumer a chance to review and dispute the company's response. Their survey showed that 13% of the consumers disputed. 46% did not dispute and 41% were pending.
Credit Card Debt
The CFPB was set up to inform and educate, review and enforce, and improve the accountability of the credit card issuers. If you have a complaint, then take advantage of their system. They have already shown positive results with real monetary relief.
However, the CFPB will not be able to help you find solutions to real debt problems, including credit card debt. Bills.com has many resources for those with credit card debt. For starters, check out the Bills.com debt relief article.
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
Collection and delinquency rates vary by state. For example, in Maryland, 16% have student loan debt. Of those holding student loan debt, 8% are in default. Auto/retail loan delinquency rate is 4%.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.