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Your Credit Card Late Fees Could be Cut: What You Need To Know About The New Rule 

Casandra Andrews  |  February 2, 2023

A new initiative could slash late fees for credit card holders from about $30 down to $8 when they make a late payment. Here’s the deal. 

If you’re tired of shelling out as much as $41 for a credit card late fee, there’s some potentially good news on the horizon. With the support of President Biden, the Consumer Financial Protection Bureau (CFPB) has proposed a rule to slash sky-high credit card fees that end up costing Americans an estimated $12 billion in late fees annually. 

The new rule would reduce typical late fees from an average of $30 down to $8, with an anticipated cost savings of as much as $9 billion a year for U.S. cardholders, according to the White House. As it stands now, whenever consumers miss a payment, we get “hit with an exorbitant late fee that far exceeds the credit card company’s costs to collect late payments,” said CFPB Director Rohit Chopra in a statement. Credit card companies have “exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” he added. 

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Specifically, the CFPB’s new proposal would amend a portion of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), to make sure the late fees are “reasonable and proportional” to the costs incurred by lenders to handle late payments. If finalized, the proposed changes would:

  • Reduce the amount of all credit card late fees down to $8.
  • Stop an automatic annual inflation adjustment to the late fees that credit card companies are allowed to charge. 
  • Cap late fees at 25% of a cardholder’s required minimum payment. (As it stands now, the rule allows a card issuer to charge a late fee that’s 100% of the minimum payment owed.) 


If you’re struggling to pay your credit card bills right now, first, know that you’re not alone. Paying down your credit card debt takes dedication — and often a lot of time. But you can get there. Here’s a look at some of our favorite budgeting methods that can help you get out of debt faster, and some of our favorite methods for paying off credit card debt (We love the snowball method!) And if you’re looking for a little more hands-on help with your money — with a dedicated money coach and a class full of accountability partners— then we’d love for you to join our 8-week FinanceFixx course, which can help set you on a better financial path. 


While skipping a credit card payment or making a late payment may not seem like a big deal, it can have a negative impact on your credit score. (And a lower credit score could mean you have to pay more for big expenses in the future because you won’t qualify for the best interest rates.)  Thankfully, you have options.  For starters, you can try asking for more time. (If you don’t ask, the answer is always no.) If you ask your credit card company politely, you could get an extension or possibly have the late fee waived. One study found that out of 1,000 people surveyed, nearly nine in 10 who tried to get a credit card late fee waived were successful. In other words, your chances are good. Another option if the minimum payments on your credit cards are too much right now, consider calling your card issuer to see about restructuring payments to a lower amount each month. 


Whenever you can, pay your bills the day they come in the mail. Research shows people who do this — those who pay their bills as they come in every month — are happier in general. Because let’s face it, you know exactly what’s going to happen to that bill if it ends up in the basket-of-no-return on your kitchen counter — it’s going to be paid late.

Also, if you aren’t already set up for automatic bill pay, it’s time to set it and forget it. A Wallethub survey found that high-income earners were twice as likely to miss a credit card payment than low-income earners simply due to forgetfulness. And your credit score isn’t something that you want to leave to chance. When it comes to bill pay, set up an automatic transfer from your checking account for at least the minimum payment on your cards so you’ll know you’re always covered. Just keep in mind that if your auto-pay is set only to the minimum payment, you’ll need to login and pay in full (or at least pay more) whenever you can so that your credit card debt never has a chance to add up. 


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