Credit Card Rewards: Are Companies Breaking the Law?

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Finance News

Credit Cards,Rewards,Consumer Financial Protection Bureau

A new survey reveals that nearly 25% of cardholders didn't redeem any rewards in 2024. The Consumer Financial Protection Bureau (CFPB) is investigating claims that some credit card companies are illegally devaluing rewards points and airline miles, or preventing cardholders from earning or redeeming them. The CFPB reports a 70% increase in complaints about credit card rewards since 2020, while the Consumer Bankers Association disputes these claims, arguing that rewards complaints are a small percentage of overall credit card complaints.

Nearly 1 in 4 cardholders — 23% — did not redeem any rewards at all in 2024, according to a new survey by Bankrate.

"Large credit card issuers too often play a shell game to lure people into high-cost cards, boosting their own profits while denying consumers the rewards they've earned," CFPB Director Rohit Chopra said in a statement."When credit card issuers promise cashback bonuses or free round-trip airfares, they should actually deliver them."

"As the CFPB's own research shows, credit cards are — by far — the best tool for the one-fifth of Americans that lack access to credit to begin building their financial lives," Johnson said.

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Credit Card Companies Warned Over Potential Rewards ManipulationThe Consumer Financial Protection Bureau (CFPB) is warning consumers about potential illegal practices by credit card companies that may devalue accrued rewards like points and airline miles. The CFPB cites issues like misleading fine print, vague contract terms, and system failures that result in consumers losing points during redemption attempts. The agency is taking action against these 'bait-and-switch tactics' with a new tool, Explore Credit Cards, designed to help consumers compare over 500 credit cards based on unbiased data.
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