The Biden Administration has been trying to create laws and rules that would limit “junk fees” charged by credit card companies and other companies with consumer fees.
One of those rules would limit credit card companies from charging late fees. The rule would drop the average credit card late fee from $32 to $8. Recently, however, a federal judge in Texas blocked this rule.
U.S. District Judge Mark T. Pittman, who was appointed by former President Donald Trump, paused the rule in response to business and banking organizations stating the rule violated certain federal statutes. Among those upset with the rule are the U.S. Chamber of Commerce and the American Bankers Association.
Some of these organizations sued the Consumer Financial Protection Bureau (CFPB), who finalized the proposed rule in March. Once finalized, lower-cost late fees would have saved American consumers an estimated $10 billion per year in 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 in the original press release finalizing the rule. “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.”
You can also plug in some simple information into Credible’s free online tool to determine if a debt consolidation loan is your best option.
1 IN 3 AMERICANS MAXING OUT CREDIT CARDS BECAUSE OF INFLATION: SURVEY
Some airlines sue Biden Administration over junk fees ruling
Another target of President Biden’s anti-junk-fees stance is major airlines, some of which are suing the Administration over its finalized ruling.
In April, The Department of Transportation released its own rule on junk fees requiring airlines to be more upfront with prices. The airlines are required to state all fees associated with checked baggage, carry-ons and changing or canceling a reservation.
Airlines for America is the group currently suing, and is composed of major U.S. airlines like American, Delta, United and JetBlue, among others. These companies are suing on the grounds that they already disclose these fees before customers buy tickets.
The Biden Administration rule also intends to put an end to “bait-and-switch” discount tactics that aren’t upfront about all the fees and costs associated with ticket purchases, even after discounts.
If you want to consolidate your debt, it can help to have experienced loan officers on your side. Visit Credible to check your personal loan rates and see how much you could save.
CONSUMERS SPEND MORE THAN $1 TRILLION ON INTEREST PAYMENTS, LARGELY DUE TO INCREASING CREDIT CARD DEBT
Consumers are frustrated with certain credit card rewards programs
Credit card users are open about their frustration with credit card companies, namely certain rewards programs, CFPB found in a recently issued report.
“Credit card companies promise upfront benefits for signing up and using their rewards card, but often bury complex terms in the fine print for using the rewards,” Chopra said. “The CFPB will be looking for ways to protect people’s points, stop bait-and-switch scams, and promote a fair and competitive market for credit card rewards.”
CFPB’s report found that credit card issuers often have hidden conditions that stop consumers from getting the rewards they were promised, effectively pulling a bait-and-switch maneuver that boils down to false advertising.
Credit card companies also reduce the value of rewards already earned by frequently upping the number of points or miles needed to redeem travel and accommodations. The report also mentioned how companies revoke rewards by instituting expiration policies.
Redeeming rewards is often difficult through some credit card issuers, the report found. Issues like technical glitches and delayed redemptions were frequently cited.
If you would like to get a sense of what debt consolidation loan options are available to you, visit Credible to compare rates and lenders.
CREDIT CARD BALANCES SURGE PAST TRILLION DOLLAR MARK AS AMERICANS STRUGGLE TO BUILD SAVINGS
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
Read the full article here