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New credit card late fee rules take effect Tuesday: Families will save billions

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  • Staff Report 

The Consumer Financial Protection Bureau (CFPB) has implemented a new rule that caps late fees on credit card payments at $8, a significant decrease from previous charges. Effective Tuesday, this regulation aims to alleviate financial burdens on U.S. families, potentially saving them an estimated $10 billion annually.

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The rule applies to large credit card issuers, affecting those with over one million open accounts. It modifies the conditions set by the 2009 Credit Card Accountability Responsibility and Disclosure Act (CARD Act), which initially allowed banks to adjust fees based on inflation, leading to fees as high as $41. The CFPB’s adjustment removes the automatic annual inflation increase for late fees and stipulates that issuers can only charge higher fees if they demonstrate the costs are necessary to cover actual collection expenses.


While the new cap will reduce the direct costs of late payments, consumers are reminded that credit card companies may still employ other measures, such as increasing interest rates or reducing credit lines, to manage late payments. This rule represents a significant shift in credit card fee structures, directly benefiting consumers by reducing the penalties for late payments.



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