Miss a credit card payment? Federal regulators want to put new limits on late fees

NPR ^ | 02/01/2023 | Joe Hernandez

[L.A.Justice]

The Consumer Financial Protection Bureau is moving ahead with a plan to place new limits on credit card late fees that it says will save consumers money and prohibit companies from charging excessive penalties. But banking groups say the proposal would result in higher costs for consumers.

The proposal comes less than a year after the bureau found that credit card companies in 2020 charged $12 billion in late fees, which have become a ballooning revenue source for lenders.

[L.A.Justice]

Under the CFPB's proposed rule published Wednesday, late fees would be capped at $8. Credit card companies could charge more if they could prove that it was necessary to cover the costs of collecting the late payment, but the bureau said it had preliminarily found that the revenue generated by late fees was five times higher than related collection costs.

The proposal would also end the automatic inflation adjustment and cap late fees at 25% of the required minimum payment rather than the 100% that's currently permitted.

I paid late fees in the past...I was not happy about that...However, I do not support too many government regulations...Like these proposed regulations...I do understand that credit card companies have make money somehow...

[HamiltonJay]

Banks have no one to blame but themselves…

They act like sharks then squeal like rabbits when they get caught.

[ElkGroveDan]

I wonder if this is going to include IRS “late fees?”

[dfwgator]

Also will result in fewer people getting credit cards, and we all know who the demographic that will be hardest is.

[pierrem15]

I do understand that credit card companies have make money somehow..

I would think the usurious interest rates they charge would provide a sufficient income.

What they are doing is maximizing revenue by issuing cards to irresponsible consumers and then charging good customers exorbitant interest rates to make up for the losses. And they are also able to do this because there are too few banks and too little competition, thanks to lobbying to make sure the anti-trust regulators remain asleep.

[PGR88]

The Consumer Financial Protection Bureau

This is the new Fedzilla Monster originally conceived by Elizabeth Warren and then put into Dodd Frank Bill, promoted by Obama.

would anyone in the GOP dare to suggest eliminating this bloated, meddling, Fed.gov central-planning bureau? No, I didn't think so.

[Chode]

there’s a difference in partial payment and no payment

when you hit the no payment stage, well...

[mountainlion]

Synchrony Bank canceled my credit card without a real reason then lied to make up one.

[SaveFerris]

Yeah I have no problem with this

I no longer have credit cards 💳💳💳 though

Just debit cards 💳💳💳

[I want the USA back]

I haven’t missed a payment in years. With this proposal, I would be paying more in fees that should rightly be paid by the offender. The credit card company will raise fees for the good customers.

Typical for democrats. They gave people permission to steal up to $950 from stores without any fear of prosecution. Their whole goal is life is to take money from the good guys and give it to the bad guys.

[BenLurkin]

Deadbeats are a Democrat Party core votet block.

[Political Junkie Too]

This is all about the Biden administration covering up how badly they screwed up the economy.

Since Credit card debt soars to record high, Biden has to ease the pain of late fees as people defer credit card payments.

So now we have a Biden pattern:

1. Defer mortgage payments at the cost to landlords
2. Defer school loan payments at the cost to taxpayers
3. Encourage deferring credit card payments by reducing late fees at the cost to lenders

What's the next consumer obligation that Biden will try to buy off?

-PJ

[SaxxonWoods]

This will force credit card companies to lower the goodies paid out to the good payers and perhaps raise their interest rates.

When someone gets something, someone has to pay for it, and it won’t be the credit card companies.

[PAR35]

I hate to pay late fees. So I almost always pay on time. But if you pay regularly, Discover will (if you ask nice) forgive one a year.

[mware]

They wanted to help consumers they would ban 24% interest rates on cards.

[SaxxonWoods]

Be careful, bankers tell me debit cards are much more dangerous regarding large fraud loss to the consumer than credit cards. You can lose the entire balance in an account that has a debit card.

[Tired of Taxes]

I never had to pay a late fee or interest on a credit card.

Use it sparingly, only for a credit score. Charge less than 10% of the limit and pay the balance in full immediately.

[SaxxonWoods]

“They wanted to help consumers they would ban 24% interest rates on cards.”

A consumer with an IQ over 80 would never put themselves in a position where they had to pay a 24% interest rate. It’s that high due to the high rate of defaults. Somebody has to pay for every loss or the system fails.

[SaxxonWoods]

When I was young and poor I had no credit card and was fine. Now I use them for convenience, pay no interest and get cash back plus security coverage. I always pay the full balance of course.

If I can’t pay the full balance, what would make me think I could pay high interest plus the full balance in the future? Especially if I keep using the card!

That’s crazy.

[BudgieRamone]

Yeah, Synchrony sent me a nasty gram saying they would cancel my card if I didnt use it. So I buy something pricey on the zero percent interest plan at the LGS and pay it off the month or two before the deferred interest would get me. F them, I’ll be a dead beat just to keep that line open.