New York – A Judge of Texas earlier this month expelled a federal rule What would you have Late Limited Credit Card at $ 8.
The consumer finance protection office ended the rule last year as part of Biden administration efforts To eliminate what he called junk rates. He was arrested by the courts before he could go into force.
At that time, the CFPB estimated that American families would have saved more than $ 10 billion in late rates annually if the rates had been limited to $ 8, significantly less than the average of $ 32.
Banks and industry groups argued that the rule did not allow card issuers to charge rates high enough to dissuade back payments and discourage repeated violations.
The judge of Texas at the beginning of this month occurred one day after a collection of main groups of the industry and the CFPB under President Donald Trump announced that they had reached an agreement to throw the rule.
This is what you should know about late credit card rates:
The average late rate for the main issuers has constantly increased since the 2010, from $ 23 at the end of 2010 to $ 32 in 2022, according to the CFPB. Wallethub, which tracks financial data, found that the average late rate in 2025 is $ 30.50, with the maximum of $ 41.
A Consumer Reports study of September 2023 estimated that 1 in 5 American adults, or around 52 million people, paid a backward rate in the previous year. The lowest revenues pay proportionally larger rates, according to the CFPB, with the largest load that falls on the color communities and those of payment of the payment check.
Enrolling in automatic payment for your credit cards can help you avoid backward payments, and there are some credit cards that do not charge backward rates (although it is important to keep in mind that these cards can have other rates or penalty structures, or higher interest rates).
Citi Simplicity and the Apple card currently do not charge late rates, and Discover offers a card that will automatically renounce the first late rate.
It is also possible to appeal the late credit card charges charged for your credit card company calling them directly. Companies will often reverse rates, especially if it is their first late payment.
You can also consider paying on your credit card balances during the month. That means that you will have paid more than the balance for when the amount expires, and maintaining your low balance in relation to your credit limit can improve your credit score.
If you have trouble getting to the end of the month, you can ask your credit issuers about difficulties programs. These are generally available for people affected by the loss of employment, disease or medical conditions, natural disasters or other emergencies.
Concerned that credit card companies were building a business -based business model, Congress approved the Law on Responsibility and Dissemination of Credit Cards of 2009 (card law), which prohibited companies from charging late excessive fees and establishing dissemination and protection of clearer consumers.
In 2010, the Board of Governors of the Federal Reserve voted to issue a regulation that implements the card law, which said that banks could only collect rates to recover the costs associated with backward payment.
However, the rule included a “immunity disposition” that allowed some banks to charge $ 25 for the first backward payment and $ 35 for subsequent backward payments, adjusted by inflation each year. Those amounts later grew to $ 30 and $ 41.
After a market data review, the CFPB finished a rule that would have limited late rates to $ 8 and finished automatic inflation settings. According to the records analyzed by the CFPB, a backward rate of $ 8 would be sufficient for card issuers, on average, to cover the collection costs incurred as a result of backward payments.
Industry groups, including the Association of Consumer Bankers, the American Banqueros Association, the United States and others, said they welcomed the Court’s decision with approval by eliminating the limit.
The groups said the rule would have led to higher interest rates and reduced credit access for card holders. The groups also said that the rule would have “reduced important incentives for consumers to handle their finances.”
The CFPB has estimated that banks bring approximately $ 14 billion in late credit cards per year.
Horacio Méndez, president and CEO of Woodstock Institute, an organization to advance economic equity, described the ruling as a “devastating blow.”
“By eliminating the common sense rule of CFPB to limit these predatory late fees, some of up to $ 41, a federal judge is putting corporations about the life of everyday consumers,” he said. “The CFPB rule was carried out with clear evidence: the credit card industry was using late tariffs as a profit engine, forcing families with the slightest financial cushion to pay.”
Méndez said that while consumers expect rates for services, these rates do not need to be punitive to be effective.
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