Biden administration would cap credit card late fees at $8, part of campaign against junk fees

[Torie]

wait, do we really think the banks are just going to eat these losses?

In theory, the fees should match the marginal cost of the risk associated with accounts in arrears. If the government chooses to subsidize such such "deadbeat" accounts, then credit card companies will cut back on cash back programs or maybe increase the interest associated with being late in payments which is a different penalty that late fees. I assume the Biden administration administration vetted this and the consequences, including the unintended consequences. in general, the Biden administration is somewhat reasonable in economics rather then being a populist ignoramus ala Huey Long of for that matter Donald Trump, who spent like a drunken sailor.

Make sense?

[FT-02 Senator A.F.E. 🇵🇸🤝🇺🇸🤝🇺🇦]

If only the word "usury" weren't so strongly associated with antisemitism, we'd have a much better term than "junk fee" to describe what's being restricted here.

We should call it riba instead

[DrScholl]

It would be better if credit card companies stopped offering credit cards to those who they know can't afford them. There are low limit credit cards designed to attract lower income consumers. Keeping fees low can definitely discourage those sort of offerings. I presume that is what this policy is mainly about. The government can't bar credit card companies from extending credit to lower income individuals, but they can make it less beneficial to do so.

[Steve from Lambeth]

How does he have the authority to do this without legislation

Better question: why doesn't he have the authority to cap late fees at $0?

[ProudModerate2]

It would be better if credit card companies stopped offering credit cards to those who they know can't afford them. There are low limit credit cards designed to attract lower income consumers. Keeping fees low can definitely discourage those sort of offerings. I presume that is what this policy is mainly about. The government can't bar credit card companies from extending credit to lower income individuals, but they can make it less beneficial to do so.

[Badger]

A lot of people ITT have no idea what being poor is like, apparently.  It's quite expensive to be so in this country.

It's a foreign concept to some, but a lot of people have to put things like groceries, bills, etc. on a credit card to just keep things going in between paychecks. It's not always easy to get the balance paid on time so there is nothing wrong with keeping credit card companies from charge excessive fees. Life is not as easy as rich conservatives portray it to be.

So very true as proven by some truly contemptible posts in this thread.

[President Punxsutawney Phil]

This seems like a solid move as things currently stand.

[Santander]

Reminder if you do pay on time this means less rewards for you.

Not necessarily. They still want you to use the card a lot vs. your debit card so they can get the transaction fees from the merchant.

Indeed, the merchant fees are what should be regulated, not the consumer fees. Small businesses getting crushed is worse for the consumer than late fees.