Why the Biggest Credit Card Companies Suppress Actual Payment Information from Your Credit Report
Last year we reported that Americans paid over $120 billion in interest and fees on credit cards annually. Since then, average credit card company interest rates have risen rapidly. It’s critical that consumers can find and switch to credit cards with the lowest, most competitive rates. For this reason, we have carefully examined the obstacles to a fair and competitive credit card market, particularly in relation to the role of consumer credit reporting.
In 2020, the CFPB found that the largest credit card companies were beginning to deliberately withhold their customers’ actual payment amounts from the nationwide consumer reporting system. Actual payments are the amount a borrower repays each month, as opposed to the minimum payment or balance. Credit card companies’ failure to report actual payment data means millions of people’s credit reports are missing basic information about their credit card payment behavior that could help many of them get better financial deals and potentially save billions of dollars in interest expenses.
The majority of accounts or “tradelines” listed on credit reports are credit and retail cards, accounting for nearly 70 percent of all tradelines shared (or “established”) in the nationwide consumer reporting system. When the largest credit card companies suppress any part of a consumer’s credit history, it has the potential to negatively impact consumers and the credit market as a whole.
Last May, we sent letters to the CEOs of the country’s largest credit card companies — JPMorgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express — asking them if they’d ever provided actual payment information. For those suppressing actual payment info, we asked why they stopped sending full dates and if they have any plans to change how they do it. Here’s some of what we’ve learned:
- Major market players made the change to suppress data within a short period of time. While our analysis did not examine whether companies had explicitly colluded, responses suggested that a large credit card company acted first, with other actors suppressing data shortly thereafter. After these players switched, the proportion of established credit card accounts with actual payment information fell by more than half, from 88 percent at the end of 2013 to just 40 percent by 2015.
- Credit card companies didn’t say when they would report actual payment information again. Although companies generally cited the positive benefits of sharing credit performance data for consumers and the economy, they did not indicate when they would return to their previous practice of reporting actual payment information. In some cases, companies have explicitly stated this not intend to do so.
- Companies suppressed data to limit competition. Responses indicated that companies were withholding information to make it difficult for competitors to offer better rates, products or services to their more profitable and less risky customers. Some companies specifically stated that they observed that other credit card companies had stopped providing actual payment information and that they did not want to suffer a “competitive disadvantage” by providing data that their competitors had chosen to share.
Check out the full summary of what we learned.
By suppressing actual payment details, the largest credit card companies are making it harder for people to buy credit and save money. People reasonably expect their positive credit behavior — like paying credit card bills every month — to be reflected in their consumer credit reports and the loan offers they receive. We will continue to monitor and address the practices of credit card companies that impede effective competition in the marketplace, such as the actual suppression of payment details. We will also report our findings to the relevant financial regulators and law enforcement agencies.