CFPB targets credit card reward programs

The Consumer Financial Protection Bureau issued a circular warning that some credit card companies operating rewards programs may be breaking the law.

Details: The CFPB’s circular says companies may violate restrictions on unfair or deceptive acts or practices under the Consumer Financial Protection Act by:

  • Devaluing earned rewards.

  • Hiding the conditions for earning or keeping rewards.

  • Failing to deliver promised benefits.

More: The CFPB also:

  • Published research that says retail credit cards that offer store-specific rewards and loyalty programs charge significantly higher interest rates than traditional cards.

  • Launched the Explore Credit Cards tool to help consumers compare credit card rates across rewards and traditional cards.