Banks Maintain Elevated Credit Card Rates Despite Withdrawal of Regulatory Threat

Many banks are holding firm on elevated credit card interest rates and fees, even after a federal court invalidated a key Consumer Financial Protection Bureau (CFPB) rule that had been cited as justification for the increases, CNBC reports.

Last year, banks responded swiftly to the CFPB’s proposed cap on late fees by raising interest rates to historic highs and introducing new monthly charges on credit cards. The rule, which was ultimately struck down in court last month, aimed to save consumers billions in late fee charges. Despite the rule’s demise, financial institutions show little appetite to reverse course.

Executives from Synchrony Financial and Bread Financial—major issuers of retail-branded credit cards for companies like Amazon, Lowe’s, and Wayfair—recently confirmed that the increased rates and fees will remain in place.

“We don’t currently have plans to roll anything back,” said Synchrony CEO Brian Doubles during an April 22 earnings call.

Bread Financial CEO Ralph Andretta shared a similar position, stating there were no intentions to undo last year’s changes.

The CFPB estimated its late fee cap would have saved American families $10 billion annually. Instead, in anticipation of reduced revenues, banks adjusted pricing models by raising average retail card interest rates, which peaked at 30.5% in 2024, according to Bankrate. Those rates have remained largely unchanged in 2025.

Some consumer advocates argue that the industry is benefiting disproportionately from these changes. David Silberman, a banking attorney and Yale Law School lecturer, noted that banks appear to be retaining extra revenue that was initially framed as necessary only under regulatory pressure.

“They didn’t think they needed this revenue before except for [the CFPB rule], and they’re now keeping it,” he said.

Retail credit cards—often offered at checkout counters and through online promotions—are a significant source of revenue for many US retailers. While these cards make up a small portion of the total credit card market, they are especially popular among consumers with subprime or no credit scores. The CFPB has found that nearly half of retail card applicants fall into this category, and approval rates tend to be higher compared to general-purpose cards from institutions like JPMorgan Chase or American Express.

Given the higher risk profile of many retail cardholders, interest rates on these cards typically run about 10 percentage points above those of general-purpose cards. Analysts say these elevated rates are unlikely to decrease soon. As of the most recent data, Citigroup’s Macy’s card carries an APR of 33.49%. Neither Citigroup nor Barclays, another large issuer in the space, commented on whether they plan to adjust their pricing.

Synchrony executives suggested that the lack of customer pushback is part of the reason for keeping current rates intact. CEO Doubles said the company observed no significant decline in account openings or spending after the changes were introduced. Instead, Synchrony plans to consider offering more promotional benefits at the retailer level, depending on ongoing partner discussions.

In a statement, Synchrony said it aims to continue providing “financial solutions that provide flexibility, utility, and meaningful value” to its customer base. Bread Financial declined to provide additional comments.

Consumer advocates remain concerned about the long-term impact of these policies. Alaina Fingal, a financial coach based in New Orleans, said many of her clients are caught in what she describes as a “debt spiral” driven by retail card usage. Promotional offers often mask complex terms such as deferred interest clauses, leading to unexpected charges.