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.