CFPB to Investigate Credit Card Reward Programs

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Is your credit card rewards program confusing? The federal government thinks it might be.

The Consumer Financial Protection Bureau is investigating whether consumers are misled when they sign up for credit card rewards, Bloomberg Businessweek says. It will examine the marketing of rewards programs, “particularly the marquee promise of a given card, such as cash back, or redeemable airline miles, and what a customer needs to do to get it.”

There’s no existing federal regulation on the disclosure of rewards, Businessweek says, and the investigation isn’t based on complaints or any perception of deceptive practices, as many CFPB efforts are.

Instead, the CFPB is taking an interest in the competitive rewards market because it believes rewards are the biggest reason consumers pick a certain card. Rewards encourage consumers to spend with that card, enabling the credit card company to rake in transaction fees from merchants on every purchase.

Many consumers don’t understand the rewards their cards offer, but it’s worth figuring out — they often amount to free money through cash back, discounted hotels, flights, gas, and other useful stuff. Check out the video below to learn how to get more from your credit card:

It’s early days for the investigation, which the CFPB isn’t even publicly talking about yet. But from what officials told Businessweek, it sounds like the agency is interested in figuring out:

  • How much participation or spending is required to get rewards.
  • Whether the conditions for receiving rewards are fairly disclosed.
  • How often the rules for getting rewards change, and whether companies are moving the goal posts.
  • Whether consumers can lose rewards, because of late payments or other reasons.

Do you think the agency should be investigating credit card rewards? What issues do you have with your credit card rewards? Comment below or on our Facebook page.

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Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • M. Baker

    If the Govt. wants to investigate this it means one thing – they want in on the action. It is just another “Nanny Govt.” show of power. They want to eliminate all competition in the market place. I chose Discover card as my credit card of choice because I liked their Rewards Program best. I had that privilege and freedom to do so because the name of the Game is called Competition and Free Choice (which the Nanny Govt. is trying – and doing- to take away from us). It seems to me that the Govt. has bigger fish to investigate – like themselves. There is quite a list – such as Bengazi, Fast and Furious, IRS, Obamacare and etc. We live in such negative times – wish it were like the “Good Ole Days: – when Govt. stuck to Govt. business and the Constitution and Bill of Rights.