Finance General United States

Credit card late fees will be capped to $8 from average paid $32

45 million American families can save $220 per year for late payment of their credit cards after the Federal regulators issued a new rule to effect 60 days after its publication in the Federal Register.

“On March 5, 2024, the Consumer Financial Protection Bureau (CFPB) finalized a rule limiting the penalty for late payment to $8 per incident, down from an industry average of $32.  According to CNBC News, “Late fees cost American households more than $14 billion a year, according to the CFPB. The bureau estimates consumers will save over $10 billion annually, thanks to the new regulation.”

For decades, banks and credit companies have exploited credit card holders and charged ‘junk fees’ to American consumers. Rohit Chopra, director of the Consumer Financial Protection Bureau said, “Today’s rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost [its] bottom lines.” in a statement.

The bureau found that even as banks have adopted cheaper processes for dealing with late payments, the fees have continued to climb, boosting bank revenues. “This is really an example of government in action to help consumers,” said Chi Chi Wu, a senior attorney at the National Consumer Law Center.

The U.S. Chamber of Commerce said the CFPB had gone too far with the new cap on late fees, which is supposed to take effect in 60 days.

However, many Americans welcome and expect the new rule to save money for their other things and release the tight checkbooks a little while.

Coree ILBO copyright © 2013-2024, All rights reserved. This material may not be published, broadcast, rewritten, or redistributed in whole or part without the express written permission.

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