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Consumer Financial Protection Bureau (CFPB) Bans Excessive Credit Card Late Fees

October 28, 2024

The Consumer Financial Protection Bureau (CFPB) has finalized a rule to curb excessive credit card late fees by large card issuers, offering significant savings for millions of Americans.

Starting soon, the typical late fees, which have been as high as $32, will have a new threshold of $8. And credit card issuers will be required to prove any higher fees are justified by actual collection costs.  The CFPB estimates this change will save Americans more than $10 billion annually, with an average savings of $220 per year for the 45 million people who face late fees.

This rule applies to the largest credit card issuers, covering more than 95% of all credit card balances in the U.S.

Key Takeaways:

  • Late fee threshold reduced to $8, and credit card companies must justify higher fees based on costs
  • No more automatic inflation adjustments.

This move is part of the CFPB’s broader effort to help protect consumers.

Source: consumerfinance.gov

This is for informational purposes only. Directors Mortgage is not a credit repair or credit counseling company and does not provide or offer such services.