Many consumers are unknowingly overpaying on credit card interest, particularly those with cards from large banks. A recent study by the Consumer Financial Protection Bureau (CFPB) highlights that small banks and credit unions typically offer significantly lower interest rates than the biggest credit card companies in the U.S. This disparity can lead to an extra $400 to $500 in interest payments annually for those carrying an average balance of $5,000. Additionally, big bank cards are more likely to come with annual fees, which can be up to 70% higher than fees from smaller institutions. While it’s crucial to pay off credit card balances in full each month to avoid interest, many Americans struggle to do so. For those who may carry a balance, switching to a card with a lower APR from a local bank or credit union could be a financially wise decision. Taking this step can help minimize unnecessary expenses and save money in the long run.
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