The New York Stock Exchange is seen during morning trading on July 31, 2024 in New York City.
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Last year, banks quickly raised interest rates to record levels and added new monthly fees on credit cards when a Consumer Financial Protection Bureau rule threatened a key revenue source for the industry.
Now, they’re far more reluctant to reverse those steps, even after bank trade groups succeeded in killing the CFPB rule in federal court last month.
Synchrony and Bread Financial, two of the biggest players in the business of issuing branded credit cards for the likes of Amazon, Lowe’s and Wayfair, are keeping the higher rates in place, executives said in recent conference calls.
“We feel pretty comfortable that the rule has been vacated,” Synchrony CEO Brian Doubles said on April 22. “With that said, we don’t currently have plans to roll anything back in terms of the changes that we made.”
His counterpart at Bread, CEO Ralph Andretta, echoed that sentiment, “At this point, we’re not intending to roll back those changes, and we’ve talked to the partners about that.”
The CEOs celebrated the end of a proposed CFPB regulation that was meant to limit what Americans would pay in credit card late fees, an effort that the industry called a misguided and unlawful example of regulatory overreach. Under previous Director Rohit Chopra, the CFPB estimated that its rule would save families $10 billion annually. Instead, it inadvertently saddled borrowers with higher rates and fees for receiving paper statements as credit card companies sought to offset the expected revenue hit.
Retail cards hit a record high average interest rate of 30.5% last year, according to a Bankrate survey, and rates have stayed close to those levels this year.
“The companies have made a windfall,” said David Silberman, a veteran banking attorney who lectures at Yale Law School. “They didn’t think they needed this revenue before except for [the CFPB rule], and they’re now keeping it, which is coming directly out of the consumer’s pocket.”
Synchrony and Bread both easily topped expectations for first-quarter profit, and analysts covering the companies have raised estimates for what they will earn this year, despite concerns about a looming U.S. economic slowdown.
Retailer lifeline
While store cards occupy a relatively small corner of the overall credit card universe, Americans who are struggling financially are more likely to rely on them, and they are a crucial profit generator for popular American retailers.
There were more than 160 million open retail card accounts last year, the CFPB said in a report from December that highlighted risks to users of the high-interest cards.
More than half of the 100 biggest U.S. retailers offer store cards, and brands including Nordstrom and Macy’s relied on them to generate roughly 8% of gross profits in recent years, the CFPB said.
Banks may be taking advantage of the fact that some users of retail cards don’t have the credit profiles to qualify for general-purpose cards from JPMorgan Chase or American Express, for example, said senior Bankrate analyst Ted Rossman.
Nearly half of all retail card applications are submitted by people with subprime or no credit scores, and the card companies behind them approve applications at a higher rate than for general-purpose cards, the CFPB said.
“Companies like Bread or Synchrony, they rely a lot more on people who carry balances or who pay late fees,” Rossman said.
Rates on retail cards have fallen by less than 1% on average since hitting their 2024 peak, and they are typically about 10 percentage points higher than the rates for general-purpose cards, Rossman said.
That means it’s unlikely that other large players in the retail card sector, including Citigroup and Barclays, have rolled back their rate increases in the wake of the CFPB rule’s demise. The most recent published APR on the Macy’s card, issued by Citigroup, is 33.49%, for instance.
Citigroup and Barclays representatives declined to comment for this article.
Debt spirals
Synchrony’s CEO gave some clues as to why banks aren’t eager to roll back the hikes: borrowers either didn’t seem to notice the higher rates, or didn’t feel like they had a choice.
Retail cards are typically advertised online or at the checkout of brick-and-mortar retailers, and often lure users with promotional discounts or rewards points.
“We didn’t see a big reduction in accounts or spend related to the actions” they took last year, Doubles told analysts. “We did a lot of test and control around that.”
Synchrony will discuss future possible changes to its card program with its brand partners, according to a spokeswoman for the Stamford, Connecticut-based bank. That could include bumping up promotional offers at specific retailers, Doubles said during the April conference call.
Brian Doubles, Synchrony President
Synchrony Financial
“Our goal remains to provide access to financial solutions that provide flexibility, utility, and meaningful value to the diverse range of customers, partners, providers, and small and midsized businesses we serve,” Synchrony said in a statement.
A Bread spokesperson declined to comment for this article.
Alaina Fingal, a New Orleans-based financial coach, said she often advises people who’ve been trapped in a debt spiral from using retail credit cards. Some have to take on side gigs, like driving for Uber Eats, to work down the balances, she said.
“They do not understand the terms, and there are a lot of promotional offers that may have deferred interest clauses that are in there,” Fingal said. “It’s extremely predatory.”
Check out the companies making headlines in after-hours trading. AppLovin – The AI-powered marketing platform saw shares rallying 13% in extended trading after the company reported stronger-than-expected quarterly results. AppLovin’s posted an EPS of $1.67, higher than an LSEG consensus estimate of $1.45 per share. Revenue of $1.48 billion also came in above expectations. The company also announced it’s selling its mobile gaming business to Tripledot Studios for consideration of $400 million in cash and an approximately 20% ownership stake in Tripledot common equity. Arm Holdings – U.S. traded shares of the chip designer slid 9% after the company’s guidance failed to impress Wall Street . Arm sees fiscal first-quarter adjusted earnings ranging from 30 cents to 38 cents a share, while FactSet consensus estimates sought 42 cents per share. Guidance on revenue for the period ranged from $1.00 billion to $1.10 billion, while estimates called for $1.10 billion. The outlook overshadowed beats on the top and bottom lines in the fiscal fourth quarter. Skyworks Solutions – The semiconductor stock dropped 4% even after the company reported stronger-than-expected earnings for the fiscal second quarter. Skyworks posted adjusted earnings of $1.24 per share on $953 million in revenue, above the $1.20 per share and $952 million in revenue that analysts surveyed by LSEG were expecting. The company also forecast upbeat earnings for the third quarter. Avis Budget – Shares gained about 2%. The car rental reported a negative adjusted EBITDA of $93 million compared to the loss of $123.1 million that analysts polled by FactSet were expecting. The company’s revenue of $2.43 billion for the quarter missed the consensus estimate of $2.49 billion, however. Bumble – The dating app soared more than 8% despite reporting flat user growth in the first quarter. Revenue during the period fell about 8% from a year ago to $247.1 million. The company also forecast second-quarter revenue of between $235 million and $243 million, which is below the FactSet consensus estimate of $243.3 million. Zillow – Shares of the real estate services company fell nearly 5% after the company warned the housing market remains challenging. Despite the decline in its share price, Zillow managed to top estimates in the first quarter, with adjusted earnings of 41 cents a share on revenue of $598 million. It was the company’s first profitable quarter since 2022. For 2025, Zillow expects revenue to grow at a low- to mid-teen pace. Flutter Entertainment – Shares of the online sports betting company slid nearly 2%. Flutter posted first-quarter adjusted earnings of $1.59 per share on revenue of $3.67 billion. That fell short of analysts’ call for $1.89 per share in earnings and $3.84 billion in revenue, per LSEG. Fortinet – The cybersecurity stock tumbled about 11%. Guidance for the full-year’s adjusted earnings came in at $2.43 to $2.49 per share, compared to LSEG consensus estimates of $2.47 per share. The outlook, which was largely in line with expectations, overshadowed a beat on earnings for the first quarter. Carvana – Shares of the online used car marketplace slipped 1% even as Carvana posted solid first-quarter results . Carvana posted earnings of $1.51 per share on revenue of $4.23 billion, while LSEG consensus estimates called for 67 cents per share and revenue of $3.98 billion. The company sees a “sequential increase in both retail units and adjusted EBITDA” in the second quarter. H & R Block – The stock gained more than 2% after the tax preparation services company posted better earnings and revenue for the fiscal third quarter than the year-ago period. H & R Block saw adjusted earnings of $5.38 per share for the period, an almost 9% jump versus a year ago. The company also reported revenue of $2.28 billion, marking a 4% gain year over year. Dutch Bros – Shares of the coffee chain jumped 5% after first-quarter results beat estimates on the top and bottom lines, helped by an increase in both comparable sales and total shop count. Dutch Bros. reported 14 cents in adjusted earnings per share on $355 million of revenue. Analysts surveyed by LSEG had penciled in 11 cents per share on $345 million of revenue. CF Industries – The fertilizer manufacturer added 1% after posting a first-quarter earnings and revenue beat. CF Industries reported earnings of $1.85 per share on revenue of $1.66 billion, exceeding the $1.48 per share and $1.54 billion analysts had respectively sought, per FactSet. The company also authorized a $2 billion share repurchase program. Axon Enterprise – The maker of the Taser jumped more than 5%. Axon reported adjusted earnings of $1.41 per share on revenue of $604 million in the first quarter. LSEG consensus estimates sought earnings of $1.27 per share and revenue of $584 million. — CNBC’s Darla Mercado, Alex Harring, Jesse Pound, Yun Li, Christina Cheddar Berk and Lisa Kailai Han contributed reporting.
Citadel CEO Ken Griffin speaks during the Semafor World Economy Summit 2025 at Conrad Washington on April 23, 2025 in Washington, DC.
Kayla Bartkowski | Getty Images
Billionaire Ken Griffin, founder and CEO of the Citadel hedge fund, said working class Americans will bear the brunt of President Donald Trump’s punitive tariffs on U.S. trading partners.
“Tariffs hit the pocketbook of hardworking Americans the hardest,” Griffin said on CNBC’s “Closing Bell” Wednesday. “It’s like a sales tax for the American people. It’s going to hit those who are working the hardest to make ends meet. That’s my big issue with tariffs. It’s such a painfully regressive tax.”
Trump rolled out shockingly high levies on imports last month, triggering extreme swings on Wall Street. The president later went on to announce a 90-day pause on much of the increase, except for China, as the White House sought to strike deals with major trading partners. Trump has slapped tariffs of 145% on imported Chinese goods this year, prompting China to impose retaliatory levies of 125%.
Griffin, whose hedge fund managed more than $65 billion at the start of 2025, voted for Trump and was a megadonor to Republican politicians. But he has also criticized Trump’s trade policy, saying it risks spoiling the “brand” of the United States and its government bond market.
“The reason the American voters elected President Trump was because of the failed economic policies of Joe Biden and the inflationary shock that reduced the real incomes of every American household,” Griffin said. “The president really does have to focus on managing inflation, because I think it’s front and center, the primary score card that American voters are going to think about when it comes to this midterm election.”
The Wall Street titan said there is a “modest” risk of stagflation as higher tariffs create both inflationary pressures and slow down the economy. He said the trajectory of the economy largely depends on how Trump’s economic policy develops.
“The question is, will all three of those come together to give us the growth that we need in our economy?,” Griffin asked. “That’s the real question we’re going to face over the next two years.”
This is a comparison of Wednesday’s Federal Open Market Committee statement with the one issued after the Fed’s previous policymaking meeting in March.
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