Why the largest credit card companies are suppressing actual payment data on your credit report
Last year, we reported that Americans paid over $120 billion annually in interest and fees on credit cards. Since that time, average interest rates charged by credit card companies have quickly increased. It’s critical that consumers can find and switch to credit cards with the lowest and most competitive rates. That’s why we’ve been carefully examining barriers to a fair and competitive credit card market, especially as it relates to the role of consumer credit reporting.
In 2020, the CFPB noted that the largest credit card companies started to deliberately suppress 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 that millions of people’s credit reports are missing fundamental information about their credit card repayment behavior that could help many of them receive better financial offers and potentially save billions of dollars in interest expenses.
The majority of accounts, or “tradelines,” listed in credit reports are credit and retail cards, which amount to nearly 70 percent of all tradelines shared (or “furnished”) into the nationwide consumer reporting system. When the largest credit card companies suppress any piece of a consumer’s credit history, it has the potential to negatively impact consumers and the credit market at large.
Last May, we sent letters to the CEOs of the nation’s biggest credit card companies—JPMorgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express—asking them if they ever furnished actual payment information. For those that suppress actual payment information, we asked why they stopped sending complete data, and if they had any plans to change their practice. Here is some of what we learned:
- Major market players made the change to suppress data within a short period of time. While our analysis didn’t seek to investigate whether entities explicitly colluded, the responses indicated that one large credit card company moved first, and other players suppressed data shortly thereafter. After the change made by these players, the share of furnished credit card accounts with actual payment information fell by more than half from 88 percent in late 2013 to only 40 percent by 2015.
- Credit card companies didn’t say when they would restart reporting actual payment information. Although companies generally cited the positive benefits of credit performance data sharing for consumers and the economy, they didn’t specify when they would return to their previous practice of reporting actual payment information. In some cases, companies explicitly stated they did not intend to do so.
- Companies suppressed data to limit competition. The responses suggested companies withheld information in an attempt to make it harder for competitors to offer their more profitable and less risky customers better rates, products, or services. A few companies specifically noted they observed other credit card companies had stopped furnishing actual payment information and didn’t want to be at a “competitive disadvantage” by providing data their competitors had chosen to stop sharing.
Check out the full summary of what we learned.
By suppressing actual payment data, the largest credit card companies are making it harder for people to shop for credit and save money. People reasonably expect that their positive credit behaviors—like paying credit card bills in full each month—will be reflected in their consumer credit reports and the credit offers they receive. We will continue to monitor and address credit card company practices that impede effective market competition, like actual payment data suppression. We will also brief the appropriate financial regulators and law enforcement agencies on our findings.