Government watchdog Accountable.US calls the major announcement Capital One will buy out Discover Financial Services — merging two of the biggest U.S. credit card companies — nothing but a raw deal for American consumers. The proposal comes on the heels of a new report from the Consumer Financial Protection Bureau (CFPB) finding Capital One is among largest credit card issuers that offer cards with a maximum purchase APR over 30 percent, needlessly costing American families an extra $400 to $500 per year. The CFPB found lack of competition “likely contributes to higher rates at the largest credit card companies” – a problem that can only get worse under this proposed anti-competitive merger.
The deal also portends more junk fees, including higher service charges and late fees. Capital One boasted of $4.9 billion in profits after the company raked in nearly $1.7 billion from “service charges and other customer-related fees.”
“Banking giants like Capital One have long exploited the lack of competition to price-gouge families with predatory credit card interest rates and hidden junk fees. Even less competition under this merger means these companies will have less incentive to check their greedy practices that nickel and dime consumers into the billions of dollars.
"Federal regulators should take a hard look into whether this deal runs afoul of antitrust rules at the expense of consumers. It’s a reminder why the Biden Administration’s ongoing efforts to crack down on excessive and hidden junk fees from big banks are a critical step towards lowering costs for Americans,” added Zelnick.
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