Uncle Sam Wants Banks To Lower CC Late Fees to $8

[Lost_in_the_HTTP]

Remember, this isn't P&N.

https://www.npr.org/2023/02/01/1153421643/credit-card-lower-late-fees-banks-cfpb

I can't say it's a great idea as it may lead to more people not paying their CC bills on time. That could lead to all sorts of things. They are too high now however. I've seen some around $40 while most are in the $30 range.

I'd rather see something like $20 with a reduction to $10 if you pay it within X days after the due date.

Pay on time: $0
Miss the due date: $20
Pay within 10 days: $20 gets reduced to $10

Bigger issue for me is the interest rates. I pay in full every month, so my rate is always 0%, but for those that carry a running balance, 15-20% seems excessive. And I've seen some over 20%. Then some banks go to a penalty rate of near 30%

 

[Braznor]

Credit cards are the invention of the Devil and the Bankers are his minions.

 

[Red Squirrel]

This seems like an odd random thing to do. If they want to help people start lowering the overall costs of living for everyone. This only slightly helps people who are financially irresponsible.

IMO the best thing one can do is to get a credit line, those tend to have low interest rates, so if you're in a situation where you need to spend a few grand on something like car repairs or house issues at least put it on the credit line and keep the credit card paid off at all times.

 

[manly]

https://www.cnn.com/2024/03/05/investing/credit-card-late-fees-biden/index.html

Most CC issuers will credit you back the late fee as a one-time courtesy (annually) if you call in and ask, esp. if you're a long-time cardholder.

 

[IronWing]

Credit cards are the invention of the Devil and the Bankers are his minions.

Only if you carry a balance, otherwise credit cards are awesome. If debit cards carried fraud protection on par with credit cards, I could see dumping the credit card. As it is, poor people pay for my convenience and my cash back, the way god intended things to be.

 

[highland145]

Credit cards are the invention of the Devil and the Bankers are his minions.

Shit, what am I then?

 

[dank69]

I hate when politicians try to reduce the efficiency of the orphan grinding machine.

 

[nakedfrog]

Shit, what am I then?

More of a freelance demon, probably.

 

[GodisanAtheist]

This seems like an odd random thing to do. If they want to help people start lowering the overall costs of living for everyone. This only slightly helps people who are financially irresponsible.

IMO the best thing one can do is to get a credit line, those tend to have low interest rates, so if you're in a situation where you need to spend a few grand on something like car repairs or house issues at least put it on the credit line and keep the credit card paid off at all times.

- I mean, aren't the fees and interest rates sort of arbitrary to begin with? What's the issue with capping them at an arbitrary lower amount?

 

[WelshBloke]

Oh no! How will the poor, poor banks make huge profits out of poor people now!

 

[dank69]

- I mean, aren't the fees and interest rates sort of arbitrary to begin with? What's the issue with capping them at an arbitrary lower amount?

Listen here. A Democrat is doing this. Everything Democrats do is done to weaken America, because they hate America. Therefore, large penalties strengthen America, and are as American as apple pie. Biden is taking away your apple pie. He must be stopped at all costs.

 

[Red Squirrel]

- I mean, aren't the fees and interest rates sort of arbitrary to begin with? What's the issue with capping them at an arbitrary lower amount?

Not an issue in itself, it's just that they do it only to buy votes. It only helps the people who are financially irresponsible and does nothing for everyone else. I'd rather see them work on reducing costs of living altogether. Credit card interest IS pretty nuts though, like 19% I think? But you're never meant to actually hit the point where you have to pay it. I just make it a habit to log into my credit card and banking site at least once a week and I pay off whatever the balance is.

 

[crashtech]

Learning from mistakes is supposed to hurt, especially when you are young and still learning to be responsible. A long time ago I missed a payment on a small second mortgage. The envelope had slid off the passenger seat and I forgot about it until too late. my credit score went down 80 points as a result. I never missed another payment.

 

[repoman0]

Not an issue in itself, it's just that they do it only to buy votes.

You are so so close to realizing that democracy is about helping people in exchange for their vote.

Unreal that we have people in here arguing FOR the biggest corporations on earth collecting more junk fees.

 

[GodisanAtheist]

I mean, I get the old school attitude about this stuff. I bounced a check once and my mom straight up slapped me and told me she wasn't raising no fool.

When I worked in an FI contact center decades later this kid bounced a check and his mom called in to yell at us for the fee on his account and called us usurious.

 

[Lost_in_the_HTTP]

Like I said above:

"I'd rather see something like $20 with a reduction to $10 if you pay it within X days after the due date."

I'm less concerned about the posted fees than I am about hidden fees and lack of transparency on policy actions.

People get their accounts closed (Alliant Credit Union just did another mass batch) without any specifics as to why. Just 'see the rules', leaving account holders to guess which one they violated.

I had a bank once that refused to post the $3 fee for ACH transfers anywhere on their fee schedule or website. You only saw it after you set up the transfer. But at least you could cancel and back out.

 

[Lost_in_the_HTTP]

And I don't think any interest rate anywhere under any circumstances, regardless of lender or customer should exceed 20%.

And yes, that includes the payday loan scammers that are trying to get the CFPB shut down for trying to reign them in.

 

[highland145]

Learning from mistakes is supposed to hurt, especially when you are young and still learning to be responsible. A long time ago I missed a payment on a small second mortgage. The envelope had slid off the passenger seat and I forgot about it until too late. my credit score went down 80 points as a result. I never missed another payment.

That is something the CFPB could look at. My oldest line is a cc from 1988, my fico runs from 840 to 850. If I go 30 days late, 1 time, -50.

And I don't think any interest rate anywhere under any circumstances, regardless of lender or customer should exceed 20%.

And yes, that includes the payday loan scammers that are trying to get the CFPB shut down for trying to reign them in.

Sure, if every borrower pays and/or there are debtors' prisons. But that's not reality. Those payday scammers lose $0.40 of every dollar that leaves their office so the other customers get to make up for it. Nothing different from "shrinkage" at stores. Everyone else pays for it. Look at Cali and major retailers shutting down over it.

I think we need the CFPB as long as they understand what they're doing and the results. In this case, cc companies will raise their rates or limit borrowing. That hurts the guy that carries a balance every month but has no late fees.

 

[Lost_in_the_HTTP]

Maybe some people shouldn't be able to borrow?

Show that you can pay your bills.

Regulate the payday scammers like banks. Limit rates and fees. If they lose money, they close down.

 

[highland145]

SC regulated most of the payday guys out of business because they refused to do it themselves. 30% every 2 weeks is slightly excessive.

Closed 'em down.... If only it were that simple....Joe needs $600 to fix his car so he can go to work but all the small dollar lenders are gone, banks won't lend to him. He can lose his job and become homeless or borrow from an unregulated source. What could go wrong?

 

[Red Squirrel]

Maybe some people shouldn't be able to borrow?

Show that you can pay your bills.

Regulate the payday scammers like banks. Limit rates and fees. If they lose money, they close down.

That's what credit score is suppose to be for but guess some places don't seem to look at it or care. But yeah if people can't pay their bills then they shouldn't be able to borrow.

 

[highland145]

That's what credit score is suppose to be for but guess some places don't seem to look at it or care. But yeah if people can't pay their bills then they shouldn't be able to borrow.

Plenty of those, which I can't understand. Guy steals from 4 loan companies 2 years ago and others, even the same ones, open him up this year. Makes no sense.

That last is what companies are supposed to do. Score the customer to make sure he can pay.

 

[Lost_in_the_HTTP]

Texas ... again.

Federal judge temporarily halts Biden plan to lower credit card late fees to $8​

ABC|10 hours ago
A federal judge in Texas temporarily halted a plan by the Biden administration to lower late fees on credit cards to $8 that was slated to go into effect next week ...


Almost seems like the Judge tried to do the right thing at first.

 

[Greenman]

The penalty rate is far more important than the late fee.

 

[K1052]

Truly (not) mysterious why the nexus of wisdom in all things somehow resides in the Northern District of Texas.