The Biden administration, meanwhile, is cracking down on credit card
fees.
A new rule will go into effect mid-May limiting how
much credit card companies can charge for late payments.
Business reporter Alexis Christoforous has more on that.
Alexis, what's this new policy and how does it compare
to the current average late fee?
So the Biden administration, we know,
has sort of made cracking down on these junk fees
a cornerstone of his economic agenda.
And if you've ever been late with a credit card
payment,
you know, those fees can be really burdensome and severe.
Depending on the credit card company or the bank,
they could be over $40 a month.
The average is at about $32.
That's still pretty hefty. And so this new rule under
the Consumer Financial Protection Bureau would.
Cap those late fees at $8 and that should be
a big savings.
You're saying a $10 billion savings for US consumers.
Currently 45 million people thereabouts are late with their credit
card payments.
So this could be a real savings for them.
So how does the role affect Americans with credit card
debt?
So this rule is coming at a time when credit
card debt we know is at an all time high.
The Federal Reserve telling us over a trillion dollars in
outstanding credit card debt.
The average family now has about $6000 in credit card
debt.
And with interest rates on those credit cards above 20%,
it's really hard to get that debt down.
Especially when now we're seeing late fees or late payments
starting to rise because more people are having a tough
time making ends meet,
putting things like essentials food on their credit cards every
month.
Banks and credit card companies responding to this,
no surprise to find they are against this rule.
These industry groups are coming out saying it's going to
hurt consumers more than help them.
They say if they if they lose that revenue stream
or it's greatly reduced from those late fees,
they're going to be forced to raise credit card interest
rates on everyone.
Look, this new rule comes out two days before President
Biden State of the Union address in an election year.
There is a lot at stake here and so far
Biden's crackdown on these junk fees don't seem to be
tracking with Americans.
You know the latest poll shows Americans only approve 34%
of Americans approve of Joe Biden's handling of the economy.
So he knows there's a lot at stake.
All right, Alexis Christophers. Thank you.