You know the saying, “No shoes, no shirt, no service”? Whether you like it or not, the shoe portion of the warning doesn’t really apply to airplanes. In fact, according to a survey conducted by Kayak, dubbed the Unspoken Rules of Air Travel, 44 percent of Americans think it’s OK to take their footwear off while at cruising altitude.
$8 cap on credit card late fees is latest win in Biden's plan to eliminate ‘junk fees’
05.03.2024 - 21:47 / thepointsguy.com / Joe Biden / Airlines / Credit Card
Federal regulators have finalized a rule to cap credit card late fees, closing a loophole the Consumer Financial Protection Bureau claims has been long exploited by large credit card issuers. The CFPB finalized the rule Tuesday, thus lowering the typical late fee from $32 to $8 for credit card issuers with 1 million or more open accounts and continuing President Joe Biden's push to eliminate fees on travel and credit cards.
According to CFPB estimates, this new rule will help American families save more than $10 billion in late fees annually once it goes into effect later this year. That's an average savings of $220 annually for the more than 45 million Americans who are charged late fees.
"For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers," CFPB Director Rohit Chopra said. "Today's rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost their own bottom lines."
The loophole referenced was part of the Credit Card Accountability Responsibility and Disclosure Act of 2009. The law banned credit card companies from charging excessive penalty fees, but the rule included an immunity provision that allowed credit card companies to charge up to $25 for the first late payment and up to $35 for subsequent late payments. Both amounts were allowed to be adjusted for inflation and rose to $30 and $41, respectively.
Rather than using late fees as a means to penalize customers, the new rule is designed to allow issuers to charge a fee that is enough to cover the collection costs incurred due to late payments. The CFPB found that $8 is typically sufficient for large card issuers to do that. Under the new rule, card issuers can charge fees above this threshold only if they can prove a higher fee is necessary to cover their collection costs.
This consumer protection-driven crackdown is just the latest win in Biden's initiative to ban so-called junk fees tacked on to hotel stays, airfare and credit cards after the fact.
The tendency of hotels to refrain from disclosing resort, destination and amenity fees seems to have gotten a bit out of control, depending on who you ask.
The president apparently agrees with travelers' woes, as expressed in his 2023 Junk Fee Prevention Act, which would ban these surprise fees that are essentially hidden surcharges that appear on a consumer's bill without warning.
Among the fees the president intends to ban are resort fees, which can cost up to $90 a night at hotels, not resorts, as Biden lamented during last year's State of the Union address.
"Biden knows good politics when he sees it. Many Americans are fed up with fees tacked
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