With higher prices stretching budgets, some people are relying more on credit cards than they have in the past. That means more people are potentially late to make their payments, but a new rule hopes to change how much that can hurt the consumer.
The Consumer Financial Protection Bureau says late payment fees cost Americans $12 billion in 2020, despite congress's attempt to ban extreme late payment fees in 2009.
The CFPB's new rule aims to get rid of a loophole the bureau says credit card companies are using unfairly, potentially saving Americans as much as $9 billion.
Currently, credit card companies can charge up to $41 every time you don't make a payment, even if you are just an hour or two late to pay.
Get Boston local news, weather forecasts, lifestyle and entertainment stories to your inbox. Sign up for NBC Boston’s newsletters.
Under the new rule, the CFPB would:
- Slash the no-questions-asked late payment fee from $41 to $8
- Ban late payment fees that are more than 25% of your monthly minimum
- Ends the automatic inflation adjustment that has grown the fee to $41
This is where the CFPB wants to hear from you. Until April 3rd, you're able to weigh in on the proposed rule and to tell the bureau if you want this change to:
- Apply to all fees from credit card companies
- Include a 15-day grace period before late fees can be charged
With higher prices, it can be hard to stay on top of your finances. If you're looking for some tips from a finance expert, we have those here.
