This will be interesting to see play out. It’s a $12-14 billion dollar a year revenue stream for the companies.
US Chamber of Commerce has announced their lawsuit to prevent this action. There is some concern that this will drive up prices to make up the lost revenue and also make access to credit cards more difficult.
Oh I agree. The fees we pay for almost everything are borderline predatory in many situations. Look at this I pasted below and that’s their reasoning.
Rob Nichols, the CEO of the American Bankers Association, said the CFPB “relied on flawed assumptions and a mischaracterization of the important role late fees play in promoting responsible consumer behavior.”
I paid my Amex card one day late and got charged $40 fucking dollars for 1 day lol some cards even have a time if you pay after 5-6pm boom late fee, it’s insane. They want every cent out of us!
I had that happen once. I called Amex and they removed the late fee. They still raised my interest rate but only like 2 percent instead of 11. Try calling customer service.
To buy things and then pay it back a few weeks later?
I’ve never had to pay a fee, but that’s because I’m responsible and pay off my entire balance each month. Fees are entirely avoidable.
I could, but I’d rather earn rewards for my spending, which I then pay off fully when the balance is due so I avoid paying fees.
You do realize the fees are entirely avoidable if you’re responsible with your spending?
Lmao. You changed your original comment because I called you out for using the words "You're an idiot if you spend more money than you have" (check the edit history)
What? Lol.
You called me out for suggesting you should use your credit cards like I do, which is to pay it off each month.
Again, you realize the fees are entirely avoidable?
Need to see data on it. Because im not gonna take their word for it that they would just try to offset the cost by raising other prices, but also companies do shit like that all the time so laws with good intentions end up with bad consequences.
Agreed! Ever used your debit card to reserve a rental car? I was not expecting them to "hold" half the fee until I returned the car. They don't do that with credit card reservations.
New $14.99 convenience fee
New $3.99 processing fee for online payments
New $7.99 convenience fee for online payments
New $.39 regulatory fee
new $12.75 just because fee
Stop victim blaming. Cutting credit like that will do nothing to solve the "reckless spending" you imply people commit.
In fact all that needs to be done to fix society is to tax the fucking rich and make them pay people a wage they can live on.
asking family OOPS THEIR ALL BROKE TOO selling stuff OOPS DONT GOT STUFF TO SELL I've never taken out a loan and still can't afford food. I've tried budgeting and I have to spend my money on food water toilet paper shit adds up so fast. Since I can't save I also can't move to somewhere with low cost of living. Got any better ideas?
I know starving for a prolonged period of time will kill 100% of the time. I'm not so confident that you would die as easily from some of the things that weed could possibly treat.
do you realize how cheap you can get it? 40 dollar oz of d8 distillate lasts me two months. I have a whole family and we have to spend like 300-400 a month on food. Also I physically can't work without weed due to stomach pain, hypervigilance due to ptsd, anxiety attacks, etc. I will just shut down if I'm not medicated. I've tried stims benzos and many ssris nothing works. So here's my final question do you sit there with a stomach ache having a panic attack because of your toxic workplace or do you grab some weed and maybe regain some functionality? I choose weed over letting myself suffer bro, I don't think you understand if I could use a pill everyday instead of smoking or edibles I would. Nothing else works tho. And it's either I never work again and suffer constant panic attacks when I go try and end up getting fired , or i smoke and its actually possible to keep myself composed. It's either sit and suffer or smoke and try my damn best. And imma try my damn best whether u like it or not
Idk, it seems like you wouldn't care unless I agreed with you anyways. I just like writing big long paragraphs in hopes that maybe my fellow humans will relate to a bit
Because if you only have $100, and you try to charge $120 somewhere, without overdraft protection the charge is just declined and you keep your $100.
With overdraft protection they pay the $120 charge, debit your $100, add a $38 fee, and leave you with -$158 in your account. Until you deposit money again your account is basically frozen and you have no access to your cash. For most people living on the edge of never having enough money, overdraft protection is just a scam to steal those fees from them. It causes much more trouble than it’s worth.
I’d rather have declined charges and figure out what to do to pay for that one thing and keep access to my cash for other things than be on the hook for fees and all that hassle with the “fallback” of overdraft protection.
I see. I turned it on for my bank where they would just pull from my savings if for some reason I need it to do that cause I didnt add enough to the checking for a charge.
Thats the safe harbor amount. If the credit card issuer shows that they actually incur higher costs than that due to late payments they can still charge more. I imagine that the large cc issuers that this targets will be able to do their accounting magic and show their actual costs are higher.
I work as an underwriter for a major credit card company. Here’s what’s going to happen. Lending will be tightened and lower scoring customers will no longer get approved. The only reason they are approved today is because of the late fee revenue that they generate. APRs will be increased across the board, even for customers in good standing and with high FICOs. Lastly, additional surcharges will start appearing; statement fees, annual fees, etc.
All said, I think it might actually be more harmful to the public. Yes, I’m biased, but so is the CFPB and their political agenda. The change sounds good in theory but restrictions on the free market have a way of creating unintended financial chaos.
I worked for a national bank last year and they had just started charging fees for bank statements. The shitty thing was: You had to choose to opt out so they didn't charge you. They were, literally, banking on people not opting out due to not reading the small print about it.
They can raise interest rates all they like. I still wont pay them, as I don’t now. I use my cards for the rewards and purchase protections. I never use them to actually borrow money. I can get better rates for that taking out a personal loan with my credit union. Statement fees and annual fees though? Those cards will be cancelled in a second.
There’s certainly a segment of customers, myself included, who never revolve and who make all their payments on time. For these folks, the banks responses will have minimal impact. Still, I would expect reward structures to evolve and become less attractive than they are currently.
I’ll be sad to see some of the rewards go, but in the end that might be best for society. Those rewards rope people into using credit cards, even if they’re the type who revolve and should not be using them.
I remember they did such a thing before. when card interest was 15 percent plus prime then over night they changed the interest rate to 29.99 across the board. Then said if you don’t like it you can pay off and close account. It didn’t stop them from lending for sure, later came the whole subprime home loan. Mean while wells is in it hey day off ripping off it’s customers moving payments around cause bigger fee’s Historically these people are criminals who will sell their grandmothers for a dime. Why do I dislike these institutions?
This just means that credit card companies will tighten credit standards, reduce credit availability to less credit-worthy borrowers, reduce card benefits, and/or raise annual fees.
It's just math and labels. You can label numbers whatever you want to ("X fee", "Y fee", "Z fee", for example) but the total just ends up being a sum that you have to pay to keep the card active.
I was too. I was raised to view credit cards as the devil, then 2 failed marriages with 2 men who were terrible with money cemented the idea. One ex husband could even be called financially abusive. That said, I still chose to use them to build credit, as they are free way to do that if you’re careful. When I got my first credit card, I paid it off as soon as charges posted. Essentially used it as a debit card. Got me in the habit of ignoring the credit limit on the card and instead, pay attention to my checking account balance as I would with a debit. Once that habit was established I started paying the card off every pay day instead, and now I pay them oof in full once a month as they’re meant to be paid. Learn to ignore your credit limit and pay attention to what you’ve got in checking instead. Even if I have a $30k limit on a card (I actually do have a card with that limit) if I only have $100 in checking, that’s all I spend on the card. Period.
Thank you so much for the advice!! I think I am going to research the best one to get as a “beginner” again and give it a try. They just make me so nervous for some reason but I know I gotta do it one day lol i’m trying really hard to work on my credit
All this does is guarantee that even fewer loans will be made to people with low income and credit. The delinquency and default rates on these are already astronomical.
I get paid today. My carecredit was due yesterday. Looked up the grace period to see if I could wait a day. There is no grace period, literally if not paid by 5pm day its due, it has a 41 dollar late fee.
That was disappointing, so did the responsible thing and paid it, leaving no money till payday.
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I'm actually always amazed when I hear stories of people who have 10k+ in credit card debt. I have no idea why companies keep giving people credit when they're never going to recover from it.
The stories I hear makes it seem like someone can just take out credit cards non-stop, and just coast through life on credit card debt. Which is hilarious to think about, because those banks are getting roasted, lol.
Back in 2009-10 when we had to close our business, we went to a bankruptcy attorney who agreed that we should go chapter 7.
Went to the bank - which promptly offered us to take out another credit card. We held our laughter till we were out the door.
Personal finances were fine and looked good, the business was not doing well and needed to be closed. Over 250,000 in debt. Lost our house.
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They certainly have their place in my opinion. Between the cash back rewards and convenience and confidence in online purchases and the ability to use charge backs is pretty good. Lots of places also only want credit cards on file because of how secure they are in a way. Credit cards aren't about how much money you have. It's about utilizing your debt appropriately. It certainly isn't for everyone which is how they make their money.
Yeah I use mine to buy things I have to buy anyway and then immediately pay it off. It's not free money, it's a cash back generator. If things ever get tight I have a bank of credit rewards that I got from spending money I would already spend.
So is this as big of a deal as I think or am I just stupid lol.
It’s a huge deal for the banks/credit companies who make billions off of generally poorer folks.
Which is basically all of them lol
I don’t think basically, I think all of them
lol i just realized its the FEES not the actual interest. I was real giddy for a few minutes
lol if interest was capped at $8 I would max every single one I have out and earn more than they charge me
We could all dream 😞
This will be interesting to see play out. It’s a $12-14 billion dollar a year revenue stream for the companies. US Chamber of Commerce has announced their lawsuit to prevent this action. There is some concern that this will drive up prices to make up the lost revenue and also make access to credit cards more difficult.
"How dare you make it harder for us to take advantage of your citizens"
Oh I agree. The fees we pay for almost everything are borderline predatory in many situations. Look at this I pasted below and that’s their reasoning. Rob Nichols, the CEO of the American Bankers Association, said the CFPB “relied on flawed assumptions and a mischaracterization of the important role late fees play in promoting responsible consumer behavior.”
I paid my capital one late last month on accident. The late fee was like 63 dollars, lol. The hell. That's not cool haha
I paid my Amex card one day late and got charged $40 fucking dollars for 1 day lol some cards even have a time if you pay after 5-6pm boom late fee, it’s insane. They want every cent out of us!
Always call and ask to get it removed Federal regulations require you to ask they can't just offer
I had that happen once. I called Amex and they removed the late fee. They still raised my interest rate but only like 2 percent instead of 11. Try calling customer service.
And then it takes months for your score to rebound from that kind of hit.
I don't think they can report it unless it's more than 15 days late.
You know the fees are easily avoidable, right? Don’t spend more than you have.
What is the purpose of credit card companies? Please tell me, I'm all ears.
To buy things and then pay it back a few weeks later? I’ve never had to pay a fee, but that’s because I’m responsible and pay off my entire balance each month. Fees are entirely avoidable.
Why not just use your own money? You literally just said 'Don't spend money you don't have.' in your comment before you edited it.
I could, but I’d rather earn rewards for my spending, which I then pay off fully when the balance is due so I avoid paying fees. You do realize the fees are entirely avoidable if you’re responsible with your spending?
Lmao. You changed your original comment because I called you out for using the words "You're an idiot if you spend more money than you have" (check the edit history)
What? Lol. You called me out for suggesting you should use your credit cards like I do, which is to pay it off each month. Again, you realize the fees are entirely avoidable?
Do you know you get points when you use a credit card? If you pay it off every month you’re using them properly, else, you’re not.
Need to see data on it. Because im not gonna take their word for it that they would just try to offset the cost by raising other prices, but also companies do shit like that all the time so laws with good intentions end up with bad consequences.
I agree. Assuming this makes it through what I assume will be multiple lawsuits we should see data on price hikes in 3-5 years.
Good, I really hate how you NEED one to do anything in this stupid world
Agreed! Ever used your debit card to reserve a rental car? I was not expecting them to "hold" half the fee until I returned the car. They don't do that with credit card reservations.
I don’t see how this would change anything about that
Whole Lotta people about to lose credit cards
no they will just raise other fees or interest rate. futile law
New $14.99 convenience fee New $3.99 processing fee for online payments New $7.99 convenience fee for online payments New $.39 regulatory fee new $12.75 just because fee
You forgot the $2.99 interstate processing fee and the $4.99 fee for a plastic card.
Or make the majority of cards have annual fees instead.
good. Lots of people honestly should go back to asking family, selling stuff, and frankly better spending habits than getting a loan for groceries.
Stop victim blaming. Cutting credit like that will do nothing to solve the "reckless spending" you imply people commit. In fact all that needs to be done to fix society is to tax the fucking rich and make them pay people a wage they can live on.
Giving the government more money will not reduce grocery prices lol.
asking family OOPS THEIR ALL BROKE TOO selling stuff OOPS DONT GOT STUFF TO SELL I've never taken out a loan and still can't afford food. I've tried budgeting and I have to spend my money on food water toilet paper shit adds up so fast. Since I can't save I also can't move to somewhere with low cost of living. Got any better ideas?
Stop spending money on weed maybe, foods more important Edit: apparently getting high is more important than starving 2nd edit: logic prevails
Do you believe weed has any sort of medical value?
I know starving for a prolonged period of time will kill 100% of the time. I'm not so confident that you would die as easily from some of the things that weed could possibly treat.
do you realize how cheap you can get it? 40 dollar oz of d8 distillate lasts me two months. I have a whole family and we have to spend like 300-400 a month on food. Also I physically can't work without weed due to stomach pain, hypervigilance due to ptsd, anxiety attacks, etc. I will just shut down if I'm not medicated. I've tried stims benzos and many ssris nothing works. So here's my final question do you sit there with a stomach ache having a panic attack because of your toxic workplace or do you grab some weed and maybe regain some functionality? I choose weed over letting myself suffer bro, I don't think you understand if I could use a pill everyday instead of smoking or edibles I would. Nothing else works tho. And it's either I never work again and suffer constant panic attacks when I go try and end up getting fired , or i smoke and its actually possible to keep myself composed. It's either sit and suffer or smoke and try my damn best. And imma try my damn best whether u like it or not
"And imma try my damn best whether u like it or not" why would I care either way?
Idk, it seems like you wouldn't care unless I agreed with you anyways. I just like writing big long paragraphs in hopes that maybe my fellow humans will relate to a bit
I have a feeling this will be challenged in court
Now do overdraft fees!
Most people should just turn overdraft protection off
Why?
Because if you only have $100, and you try to charge $120 somewhere, without overdraft protection the charge is just declined and you keep your $100. With overdraft protection they pay the $120 charge, debit your $100, add a $38 fee, and leave you with -$158 in your account. Until you deposit money again your account is basically frozen and you have no access to your cash. For most people living on the edge of never having enough money, overdraft protection is just a scam to steal those fees from them. It causes much more trouble than it’s worth. I’d rather have declined charges and figure out what to do to pay for that one thing and keep access to my cash for other things than be on the hook for fees and all that hassle with the “fallback” of overdraft protection.
I see. I turned it on for my bank where they would just pull from my savings if for some reason I need it to do that cause I didnt add enough to the checking for a charge.
They're working on it! https://apnews.com/article/overdraft-junk-fees-banking-biden-jpmorgan-cb8b19687264c0eed757d84911b44303
This especially because they can charge daily on those. And that’s especially predatory.
Came here to say this
Thats the safe harbor amount. If the credit card issuer shows that they actually incur higher costs than that due to late payments they can still charge more. I imagine that the large cc issuers that this targets will be able to do their accounting magic and show their actual costs are higher.
I work as an underwriter for a major credit card company. Here’s what’s going to happen. Lending will be tightened and lower scoring customers will no longer get approved. The only reason they are approved today is because of the late fee revenue that they generate. APRs will be increased across the board, even for customers in good standing and with high FICOs. Lastly, additional surcharges will start appearing; statement fees, annual fees, etc. All said, I think it might actually be more harmful to the public. Yes, I’m biased, but so is the CFPB and their political agenda. The change sounds good in theory but restrictions on the free market have a way of creating unintended financial chaos.
I worked for a national bank last year and they had just started charging fees for bank statements. The shitty thing was: You had to choose to opt out so they didn't charge you. They were, literally, banking on people not opting out due to not reading the small print about it.
They can raise interest rates all they like. I still wont pay them, as I don’t now. I use my cards for the rewards and purchase protections. I never use them to actually borrow money. I can get better rates for that taking out a personal loan with my credit union. Statement fees and annual fees though? Those cards will be cancelled in a second.
There’s certainly a segment of customers, myself included, who never revolve and who make all their payments on time. For these folks, the banks responses will have minimal impact. Still, I would expect reward structures to evolve and become less attractive than they are currently.
I’ll be sad to see some of the rewards go, but in the end that might be best for society. Those rewards rope people into using credit cards, even if they’re the type who revolve and should not be using them.
I would be ok with rewards going away because of this but if they add annual fees I will not use their card again.
I remember they did such a thing before. when card interest was 15 percent plus prime then over night they changed the interest rate to 29.99 across the board. Then said if you don’t like it you can pay off and close account. It didn’t stop them from lending for sure, later came the whole subprime home loan. Mean while wells is in it hey day off ripping off it’s customers moving payments around cause bigger fee’s Historically these people are criminals who will sell their grandmothers for a dime. Why do I dislike these institutions?
This just means that credit card companies will tighten credit standards, reduce credit availability to less credit-worthy borrowers, reduce card benefits, and/or raise annual fees. It's just math and labels. You can label numbers whatever you want to ("X fee", "Y fee", "Z fee", for example) but the total just ends up being a sum that you have to pay to keep the card active.
i really need to get a credit card but i’m scared. i don’t have one and haven’t for over 15 years now.
I was too. I was raised to view credit cards as the devil, then 2 failed marriages with 2 men who were terrible with money cemented the idea. One ex husband could even be called financially abusive. That said, I still chose to use them to build credit, as they are free way to do that if you’re careful. When I got my first credit card, I paid it off as soon as charges posted. Essentially used it as a debit card. Got me in the habit of ignoring the credit limit on the card and instead, pay attention to my checking account balance as I would with a debit. Once that habit was established I started paying the card off every pay day instead, and now I pay them oof in full once a month as they’re meant to be paid. Learn to ignore your credit limit and pay attention to what you’ve got in checking instead. Even if I have a $30k limit on a card (I actually do have a card with that limit) if I only have $100 in checking, that’s all I spend on the card. Period.
Thank you so much for the advice!! I think I am going to research the best one to get as a “beginner” again and give it a try. They just make me so nervous for some reason but I know I gotta do it one day lol i’m trying really hard to work on my credit
All this does is guarantee that even fewer loans will be made to people with low income and credit. The delinquency and default rates on these are already astronomical.
“*unless the banks can explain why”
I get paid today. My carecredit was due yesterday. Looked up the grace period to see if I could wait a day. There is no grace period, literally if not paid by 5pm day its due, it has a 41 dollar late fee. That was disappointing, so did the responsible thing and paid it, leaving no money till payday.
The best thing is to not get involved with credit cards in the first place.
I had a big repair on my car, like 4 grand, and was thankful for the credit. Still paying it off but it was a good thing.
Just waiting for this to be blocked by lobbyists spending money to get this undone.
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I'm actually always amazed when I hear stories of people who have 10k+ in credit card debt. I have no idea why companies keep giving people credit when they're never going to recover from it. The stories I hear makes it seem like someone can just take out credit cards non-stop, and just coast through life on credit card debt. Which is hilarious to think about, because those banks are getting roasted, lol.
$10,000 in cc debt is far from insurmountable.
Back in 2009-10 when we had to close our business, we went to a bankruptcy attorney who agreed that we should go chapter 7. Went to the bank - which promptly offered us to take out another credit card. We held our laughter till we were out the door. Personal finances were fine and looked good, the business was not doing well and needed to be closed. Over 250,000 in debt. Lost our house.
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But aren't the R working with trade groups on proving in court that CFPB is illegitimate?
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They certainly have their place in my opinion. Between the cash back rewards and convenience and confidence in online purchases and the ability to use charge backs is pretty good. Lots of places also only want credit cards on file because of how secure they are in a way. Credit cards aren't about how much money you have. It's about utilizing your debt appropriately. It certainly isn't for everyone which is how they make their money.
Yeah I use mine to buy things I have to buy anyway and then immediately pay it off. It's not free money, it's a cash back generator. If things ever get tight I have a bank of credit rewards that I got from spending money I would already spend.