CFPB finalizes rule capping credit card late fees at $8 on average

A new CFPB rule caps credit card late fees to 25% of the required payment and ends the automatic inflation adjustment for these charges.

The Consumer Financial Protection Bureau is finalizing a rule that limits how much consumers are charged in late fees.The rule caps late fees to 25% of the required payment and ends the automatic inflation adjustment for these charges, according to the CFPB. Credit card companies can still charge late fees, but under the new provision, they must prove that their fees align with their collection costs.

"The CFPB has openly conceded that the majority of cardholders will likely see their credit card interest rates increase and credit availability decrease. "This will be particularly impactful for the nearly 50% of subprime card consumers who work hard and budget to successfully pay their bills on time – and will now have a harder time obtaining credit, managing their debt and growing their credit histories," Johnson continued.

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