Demand Progress

In his State of the Union address, President Biden called for an end to credit card junk fees. “Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in,” he said. “They add up to hundreds of dollars a month.”¹

We couldn’t agree more with the President. Credit card junk fees are one of the many ways that banks take advantage of working people, and they must be put to an end.

Right now, credit card companies charge consumers up to $41 per month for each late payment. With soaring costs of living, these fees are immense for working people who are already struggling to pay their bills. The Consumer Financial Protection Bureau (CFPB) estimates that credit card fees cost Americans over $12 billion each year.²

It doesn’t need to be this way. President Biden and the CFPB have proposed new rules that would cap credit card late fees at $8 per month, along with over measures to keep fees down. Such changes would save consumers an estimated $9 billion per year.

These are common sense reforms, but the big banks and their Republican allies have already launched a serious battle to derail them. One banking lobbyist said the industry is “livid” and pledged to do everything possible to fight the new rules.³ Republicans said they are offended that President Biden even used the term “junk fees.”⁴

We can’t let the big banks stop reforms that help working people. It’s time to end credit card junk fees.

Sources:

1. The White House, “Remarks of President Joe Biden – State of the Union Address as Prepared for Delivery,” February 7, 2023.
2. Consumer Financial Protection Bureau, “CFPB Proposes Rule to Rein in Excessive Credit Card Late Fees,” February 1, 2023.
3. Forbes, “Federal Bid To Curb Credit Card Late Fees Faces Tough Road Ahead,” February 1, 2023.
4. Daily Kos, “Senate GOP is offended that Biden is being mean to banks and stopping them from cheating you,” October 31, 2022.