Government to limit credit card late fees to $8

The Biden administration announced it will be capping credit card late fees at $8 soon, targeting “junk fees” that the Consumer Financial Protection Bureau (CFPB) says affect 45 million card-holding Americans.

The CFPB estimates the policy could save cardholders about $10 billion annually.

Once the rule goes into effect later this spring, it would largely focus on late fees on the largest credit card issuers with at least 1 million open accounts.

It means banks like Bank of America, Capital One, Citibank and JPMorgan Chase cannot charge over $8 per incident.

The regulation is likely to face legal resistance from the credit card industry, which earned over $14 billion from late fees in 2022.

Some financial experts are concerned that banks may compensate for lost revenue by increasing other fees for card owners.