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Published: Feb 01, 2023 3 min read
Collage of Joe making his speech + credit card
Eddie Lee / Money; Getty Images

President Joe Biden wants to rein in what his administration sees as excessive late fees charged by credit card companies. Biden is announcing a new rule on Wednesday that would lower credit card fees to $8 for a late payment, down from the current $41 limit.

Why it matters

Americans are charged about $12 billion each year in credit card late fees, according to the Consumer Financial Protection Bureau (CFPB), a federal watchdog agency. The fees vary by issuer, but typically are the equivalent of the minimum monthly payment amount for the first missed payment — up to a max of $30 — and up to $41 for subsequent missed payments. The CFPB is the government body in charge of proposing the new rule, which would not require Congressional approval.

  • The CFPB estimates the rule would reduce late fees charged to credit card holders by upwards of $9 billion per year.