CFPB Proposes Limiting Credit Card Late Fees To Eight Dollars
You can’t buy much for eight dollars these days. It is fun to reminisce about the days when you could get a combo meal from McDonald’s for eight bucks, but it is depressing to think about how much a single dose of junk food costs today. If you can remember when eight dollars was enough to get in on a multilevel marketing (MLM) scheme, you are officially old, especially when you consider that the only MLMs to choose from in those days were Amway and Mary Kay. If you heard that anything cost only eight bucks today, you would think of it as throwback pricing, a gimmick, a publicity stunt. The cynics among us may call it performative, but the Consumer Financial Protection Bureau (CFPB) has proposed a new rule that would cap the amount that credit card companies could charge in late fees at eight dollars per billing cycle. If you are so used to struggling with credit card payments that only having to pay eight dollars per month in late fees sounds like a relief, contact a Boca Raton debt lawyer.
What Determines How Much You Must Pay in Credit Card Late Fees?
The Credit Card Accountability Responsibility and Disclosure Act of 2009 allows credit card companies to charge late fees to customers who miss a monthly minimum payment, but it requires that the fees be “reasonable and proportional,” and it prohibits excessive fees. “Proportional” presumably means that the late fee amount is based on the minimum payment amount, but it does not specify what percentage of the minimum payment is an appropriate amount for a late fee. Furthermore, what counts as a reasonably late fee is a matter of opinion.
Credit card companies charge late fees mainly as a deterrent to missing payments. They want to make money off of on-time payments, but consumers’ financial circumstances have gotten so bad that late fees are an increasingly regular occurrence. Some credit card companies charge up to $41 per month in late fees.
Consumer Financial Protection Bureau Takes Aim at Junk Fees
The Consumer Financial Protection Bureau announced that it has proposed a new rule that would limit the amount of late fees that a credit card company could charge to one account in one month to eight dollars. This is part of the CFPB’s larger efforts to crack down on junk fees, which are fees that serve no other purpose than to punish consumers for their inability to pay. If you look at an itemized statement of any of the bills that plague you each month, you will probably find many unnecessary fees and surcharges, in addition to principal and interest.
Work With a Debt Lawyer to Break Free From Junk Fees
A South Florida debt lawyer can help you if credit cards and other debts have tacked on so many pointless fees that now you are struggling to keep up with the monthly minimum payments. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.