AmEx would be the first credit card issuer to raise the late-pay fee since the CFPB said earlier this year that the higher rate could go up by $1 to $38 starting in January 2017.

AmEx Reportedly First to Raise Fees for Late Payments Under Relaxed Rule

AmEx Reportedly First to Raise Fees for Late Payments Under Relaxed Rule

Consumers have generally gotten a break from those strict credit card late-payment fees since legislation was enacted in 2010 to curtail lender abuses in the wake of the financial crisis.

A report released a year ago by the Consumer Financial Protection Bureau (CFPB) found that the Credit Card Accountability Responsibility and Disclosure (CARD) Act helped consumers avoid $7 billion in late fees.

However, credit card late fees are going up in 2017. The Wall Street Journal is reporting that American Express will charge customers as much as $38 if they are late on more than one payment in a six-month period. That’s the maximum allowed by the CFPB. Late fees were capped by the CARD Act.

AmEx would be the first credit card issuer to raise the late-pay fee since the CFPB said earlier this year that the higher rate could go up by $1 to $38 starting in January 2017.

The higher late fees had averaged about $39 before the CARD Act. In 2013, the CFPB had set the maximum for repeat late payment at $35. Since then it has moved up to the $38 limit.

The CFPB has reported that many consumers still face late fee hurdles. In any three months, 1 in 5 consumers pays a late fee, according to the CFPB. That’s down from 1 in 4 before the CARD Act was enacted.

 

 

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