Advocates say credit card late fees harm consumers, pad company profits
A consumer advocacy group is responding to news that Americans paid $130 billion in credit card interest and fees last year. The group, Accountable.us, says excessive late fees assessed by credit card companies harm the consumers least able to pay while padding company profits.
The group laid blame for the propagation of these so-called "junk fees" at the feet of congressional leaders it says are beholden to the credit card industry.
“Credit card debt has reached levels never seen before thanks to billions of dollars in abusive junk fees, yet Republicans in Congress like Rep. Patrick McHenry only see dollar signs for their big bank contributors,” said Accountable.US’ Liz Zelnick, the group behind the Defend American Consumers campaign. “After cashing checks from corporations notorious for junk fees, McHenry claims the practice somehow does consumers a favor by separating them from billions in hard-earned money every year. Lawmakers bought and paid for by credit card companies claim a $35 overdraft fee on a gallon of milk or loaf of bread teaches Americans financial responsibility even though the excessive penalties are often buried in the fine print. Those in Congress that defend the status quo of record high credit card interest and fees should at least be honest about why they shill for the financial industry at the expense of everyday families.”
The report detailing the level of credit card debt held by Americans and noting the amount paid in late fees was produced by the Consumer Financial Protection Bureau (CFPB).
CFPB leaders say they are working on actions that will reduce junk fees and encourage credit card companies to compete on service.
“Last year, Americans paid $130 billion in interest and fees on their credit cards," said CFPB Director Rohit Chopra. "With credit card debt crossing the trillion dollar mark, we will be working to prevent bait-and-switch tactics when it comes to rewards and to increase refinancing activity so consumers can get lower rates.”