Ever leave your credit card at the bar? Nothing’s better than the next-day walk of shame to get it back. 🥴 Might as well stick around for bottomless mimosas! 🥂
The Consumer Financial Protection Bureau (CFPB) was put in place to protect consumers against financial funny business. 🤑 However, some of its rules are getting the ax through Trump administration updates.
Here’s Five Fast Facts on the CFPB and your credit cards:
- 💸 Fees Louise - Last March, the CFPB dropped the maximum credit card late fee down to $8. Before that, the average fee was around 32 bucks. According to the CFPB, credit card companies took advantage of a loophole in the 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. This resulted in companies pocketing $14B in excess annual fees.
- 🧢 No Cap - Now, that rule was recently overturned by a U.S. district court - we’re back to no cap on late fees. The argument is that lower late fees ultimately penalize responsible credit card holders by shifting costs to them.
- 💳 (Over)Draft Day - But wait! There’s more. The Trump administration also recently flipped another CFPB rule around capping overdraft fees. It’s estimated that this CFPB cap saved Americans who over-drafted their accounts up to $225 a year.
- 📈 Johnny Debt - By the end of 2024, American household debt reached a staggering $18T. Credit card debt alone came in over a trillion dollars and delinquencies are climbing. Last year, 37% of credit card holders say they paid their bill late and got slapped with a fee.
- 🔮 Future Forward - What will ultimately happen to the CFPB? According to a recent ruling, the Trump administration has the power to reduce the size of the CFPB, but it can’t dissolve it completely. However, it can continue to reverse rulings like the ones above.
🔥Bottom line: As all the government changes keep on keepin’ on, we’ll keep on tracking how they impact your paycheck. Wondering if you should cash out your stocks amidst all the market madness? You might wanna hold those horses, partner. Check out this article to pick up some smart moves.
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