Summary
credit card late charge maximum.. The debt held by Americans has grown significantly; it surpassed $1 trillion last year and is still approaching new highs. Delinquency on credit card loans is also increasing.
credit card late charge maximum
In regards to late credit card payments, the Consumer Financial Protection Bureau (CFPB) reports that over 45 million individuals incur late fees. Every year, credit card users pay billions of dollars in late fees. Given these numbers, and in an effort to alleviate financial hardship for those in need, the Biden Administration has adopted new laws that would cap late fees at $8 and do away with the infamous “junk charges.”
“Credit card companies have been taking advantage of a loophole for over ten years in order to charge American customers billions of dollars in unnecessary fees. In a statement sent to CNN, CFPB Director Rohit Chopra contended that the new regulation “ends the era in which big credit card companies hide behind the excuse of inflation when they raise rates on borrowers to improve their own bottom lines.”
Here are several things to be aware of regarding the $8 cap.
This new rule will only apply to major financial companies—that is, those with more than a million active accounts—per official information from the CFPB. This amounts to 95% of the clientele with credit card debt. The government projects that households will save about $20 billion annually with this strategy.
The $8 late payment cap is anticipated to go into effect on June 1st, since the regulations take effect 60 days after they are published in the Federal Register.
Chamber of Commerce aims to stop new regulations
Chamber of Commerce aims to stop new regulations
However, a number of banking organizations have criticized the new regulation.
In light of this, the US Chamber of Commerce threatens to file a lawsuit to stop the law from going into effect anytime soon.
“The Consumer Financial Protection Bureau has overreached its jurisdiction once more. Neil Bradley, the Chamber’s policy director, claims that the agency’s final rule on credit card late fees “punishes Americans who pay their credit card bill on time, forcing them to pay for those who don’t.”