--- title: Biden's New Plan to Slash Credit Card Late Fees Could Save Americans $9 Billion per Year description: President Joe Biden is introducing a new rule to limit credit card late fees to a maximum of $8, down from a current limit of $41. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 498 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-02-01T19:32:28.000Z' modified: '2024-01-10T14:33:42.000Z' section: Economy and Politics tags: - Credit Cards - fees - News word_count: 424 canonical: https://money.com/biden-plan-credit-card-late-fees/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Collage of Joe making his speech + credit card](https://img.money.com/2023/02/News-Joe-Limit-creditcard-7.jpg) President Joe Biden wants to rein in what his administration sees as excessive late fees charged by [credit card companies](https://money.com/best-credit-cards/). 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. - The agency is collecting public comment on the proposal, and the details may change based on the comments it receives. - The rule could go into effect as early as 2024. [CFPB Director Rohit Chopra](https://money.com/changemakers/rohit-chopra/) outlined the new rule to reporters on a call Tuesday, ahead of Biden’s announcement. “By our estimates, 75% of late fees — $9 billion — have no purpose beyond padding the credit card companies’ profits,” Chopra [said](https://www.consumerfinance.gov/about-us/newsroom/director-chopras-remarks-on-press-call-for-credit-card-late-fees-nprm/) on the press call. ## Key context The CFPB says this new rule is an effort to close a loophole in the 2009 [Credit Card Accountability Responsibility and Disclosure (CARD) Act](https://www.ftc.gov/legal-library/browse/statutes/credit-card-accountability-responsibility-disclosure-act-2009-credit-card-act), which was passed by Congress to, in part, enhance disclosures and limit fees for consumers. - However, after its passage, the Federal Reserve added an “immunity provision” on certain fees like the late payment fee, allowing credit card companies to charge what the CFPB now sees as unreasonably high late fees. - The current cap to these specific late fees that are immune from the CARD Act rise annually based on inflation. The CFPB also wants to end that provision. "We found that, over time, this loophole has morphed into a multi-billion dollar bonanza," Chopra said. The new proposal is the latest effort from the Biden administration to curb what it calls “[junk fees](https://money.com/mortgage-bank-fees-complaints-cfpb/).” Other junk fees in the Biden administration’s sights include [fees for overdrafts, non-sufficient funds](https://money.com/citi-eliminating-overdraft-fees/) and bounced checks as well as other fees levied by phone service providers, hotels and airlines. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/biden-plan-credit-card-late-fees/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Politics", "item": "https://money.com/politics/" }, { "@type": "ListItem", "position": 4, "name": "Biden's New Plan to Slash Credit Card Late Fees Could Save Americans $9 Billion per Year" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/biden-plan-credit-card-late-fees/#webpage", "url": "https://money.com/biden-plan-credit-card-late-fees/", "name": "Biden's New Plan to Slash Credit Card Late Fees Could Save Americans $9 Billion per Year", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-02-01T19:32:28.000Z", "mainEntity": { "@id": "https://money.com/biden-plan-credit-card-late-fees/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/biden-plan-credit-card-late-fees/#breadcrumb" }, "dateModified": "2024-01-10T14:33:42.000Z" }, { "@type": "NewsArticle", "headline": "Biden's New Plan to Slash Credit Card Late Fees Could Save Americans $9 Billion per Year", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/02/News-Joe-Limit-creditcard-7.jpg", "width": 2880, "height": 1920, "caption": "News-Joe-Limit-Creditcard-Fees" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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