US Watchdog Warns Credit Card Issuers: Don't Devalue Rewards

The Consumer Financial Protection Bureau (CFPB) has recently issued a warning to credit card issuers, urging them not to devalue rewards programs. This move comes amidst reports of issuers reducing rewards rates and increasing fees, which can significantly impact consumers' ability to maximize benefits. The CFPB's action highlights the importance of regulatory oversight in maintaining consumer value and fostering a more competitive and consumer-friendly market.

High interest rates and junk fees have already taken a toll on consumers, with Americans paying a record $130 billion in interest and fees in 2022. The CFPB estimates that the average American could save over $400 a year in interest charges by switching to a smaller credit card provider with lower APRs. However, devalued rewards could offset these savings, making it more difficult for consumers to save money and manage their credit card debt.

To effectively compare and choose credit cards with more valuable rewards programs, consumers should consider the following steps:

1. Understand your spending habits: Identify your most frequent purchases to determine which rewards categories align with your spending.
2. Calculate rewards value: Evaluate the rewards rate and redemption value to understand the actual value of rewards earned.
3. Consider sign-up bonuses: Many cards offer substantial sign-up bonuses, which can significantly boost your rewards earnings in the first year.
4. Compare annual fees: Weigh the annual fee against the rewards value and other benefits, such as travel insurance or airport lounge access.
5. Check for hidden fees and restrictions: Be aware of foreign transaction fees, balance transfer fees, and other hidden costs that can diminish rewards value.
6. Monitor your credit score: Better credit scores unlock more competitive rewards cards. Regularly check your score and work on improving it if necessary.
7. Use tools and websites: Utilize online resources like NerdWallet, Credit Karma, or Bankrate to compare cards, read reviews, and calculate rewards value based on your spending habits.

By following these steps, consumers can make informed decisions and choose credit cards with more valuable rewards programs tailored to their spending patterns.

The CFPB's warning serves as a reminder for issuers to maintain transparency and fair practices in their rewards programs. By enforcing these standards, regulators can help ensure that credit card rewards remain a valuable incentive for consumers, fostering a more competitive and consumer-friendly market.



In conclusion, the CFPB's warning highlights the importance of regulatory oversight in maintaining consumer value in credit card rewards programs. By following the steps outlined above, consumers can effectively compare and choose credit cards with more valuable rewards programs, while issuers should strive to maintain transparency and fair practices to avoid devaluation tactics that mislead consumers.