CFPB analysis: Switching to small banks and credit unions can save credit card holders hundreds per year

The Consumer Financial Protection Bureau's analysis discovered that the largest U.S. lenders charged 8 to 10 percentage points higher annual percentage rate on credit cards compared to smaller lenders in the first half of 2023. 

This could potentially save the average cardholder hundreds of dollars annually. With the U.S. Federal Reserve increasing its benchmark interest rate, rates for consumer debt and savings products have risen. The average person has a balance of $6,360. According to the CFPB, consumers with a $5,000 balance can save $400 to $500 a year by using cards from small versus large lenders.

Impact of interest rate differences on consumers

The higher annual percentage rates charged by larger U.S. lenders have a significant impact on consumers' finances. This discrepancy could lead to substantial savings for the average cardholder, especially during a period of increasing benchmark interest rates set by the Federal Reserve.