Major Retail Card Issuers Keep High Interest Rates Despite Court Victory Over CFPB Rule

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

---

Image Source: Michael M. Santiago | Getty Images

In the wake of a federal court decision striking down a key Consumer Financial Protection Bureau (CFPB) rule intended to cap credit card late fees, major retail card issuers are showing little interest in reversing the sharp interest rate hikes and new fees introduced in anticipation of the now-defunct regulation.

Executives at Synchrony Financial and Bread Financial two of the largest issuers of private-label credit cards for brands like Amazon, Wayfair, and Lowe’s have indicated they will maintain the higher rates, even after successfully challenging the CFPB’s proposed rule in court last month.

“We feel pretty comfortable that the rule has been vacated,” said Synchrony CEO Brian Doubles during an April 22 earnings call. “With that said, we don’t currently have plans to roll anything back in terms of the changes that we made.”

Bread Financial CEO Ralph Andretta echoed the sentiment, stating, “At this point, we’re not intending to roll back those changes, and we’ve talked to the partners about that.”

The now-vacated rule, introduced under CFPB Director Rohit Chopra, aimed to limit late fees on credit cards potentially saving American families $10 billion annually. However, in a preemptive response, many card issuers increased annual percentage rates (APRs) and introduced new fees, citing the need to recover expected revenue losses.

Retail credit card interest rates surged to a record average of 30.5% in 2024, according to Bankrate, and remain elevated in 2025. Companies like Synchrony and Bread have reported strong financial results, easily surpassing analyst expectations in the first quarter, even as broader concerns about a U.S. economic slowdown persist.

Critics argue the move underscores the industry’s reliance on vulnerable consumers. Retail credit cards, which account for a modest share of total credit card spending, disproportionately serve Americans with subprime credit scores or no credit history. According to the CFPB, nearly half of all retail card applications come from this group, and the approval rates are higher than for general-purpose cards issued by institutions like JPMorgan Chase or American Express.

“Companies like Bread or Synchrony, they rely a lot more on people who carry balances or who pay late fees,” said Ted Rossman, a senior analyst at Bankrate.

The average APR on store cards continues to hover roughly 10 percentage points higher than those of traditional cards, with some such as the Macy’s card issued by Citigroup advertising rates as high as 33.49%. Citigroup and Barclays, other major players in the retail card space, declined to comment on whether they plan to lower their rates.

Synchrony’s CEO acknowledged that the rate increases have not deterred consumers. “We didn’t see a big reduction in accounts or spend related to the actions,” Doubles said, noting that many consumers either didn’t notice or felt they had no alternatives.

Consumer advocates warn of the long-term effects of such high-cost borrowing. “They do not understand the terms, and there are a lot of promotional offers that may have deferred interest clauses,” said Alaina Fingal, a financial coach based in New Orleans. “It’s extremely predatory.”

While banks are benefiting from elevated profits, many retail cardholders find themselves caught in debt spirals, resorting to side gigs just to make minimum payments. The court’s ruling may have voided the CFPB's effort, but the financial burden for millions of American consumers remains firmly in place.