Finances

What are junk fees, and how is the White House tackling other rising costs?

Discover junk fees and how they can add to your final bill. Plus, find out more about President Biden's efforts to tackle rising costs for lower-income individuals and families nationwide.

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Uncover the “hidden” costs of your bills: Learn what are junk fees!

Do you know what junk fees are? Source: Freepik.

As the cost of living continues to rise, consumers need to be aware of hidden and miscellaneous costs. Also known as junk fees. But what are junk fees?

 These extra charges quickly add up and can take you by surprise when you receive your final bill. 

Thankfully, the White House is taking steps to help reduce these added costs for lower-income individuals and families struggling with rising food, healthcare, housing, and other expenses. 

In this blog post, we’ll discuss what junk fees are. Also, which products they may occur on, and how they impact American households’ budgets nationwide. And what President Biden’s administration is doing to help put an end to them

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The White House is Taking Action to Protect Consumers from Rising Prices

As consumers, it’s disheartening to look at how quickly and consistently prices for the goods and services we rely on can shoot up seemingly overnight. 

From rising medical fees to increased costs for gas and food, these sudden hikes in cost hit hard. Especially when extra charges sneakily hide under the name of ‘junk fees.’ 

Now, however, the White House is stepping in to fight back against price tags of this kind. But what does that mean for us? 

In this article, we’ll take a deep dive into the effort being made by our nation’s highest office order to protect consumers from continuously growing prices. Read on to discover exactly how they’re doing it!

What are junk fees?

Hidden charges are everywhere. Source: Freepik.

“Junk fees” is a phrase that has been around for many years. Especially within the real estate industry, to refer to extra costs that arise during home sales. 

These costs are often expensive and unexpected, such as hidden charges for a hotel room or concert tickets. In recent years, junk fees have become even more widespread as additional hidden services have been added to the list. 

These include airfare costs, bank overdraft fees, credit card late fees, resort fees, and switching fees for phones and the internet. And also service fees for concerts and sporting events. 

Recently President Joe Biden called out what he deemed unfair and unjustified junk fees. 

With junk fees, the general trend is that you’re paying significantly more than it actually costs to provide the service. 

What’s worse is that people often don’t realize what they are being charged for until after the fact.

Say Goodbye to Unfair Charges: How Biden is Helping Consumers

As Joe Biden said in his major address, Americans are tired of being taken for a ride by greedy corporations. 

The president’s proposed Junk Fee Prevention Act aims to end what has been dubbed “junk fees,”. Which are extra costs on services like airline tickets, mobile phone contracts, and event tickets. 

Biden urged Congress to pass this Act so consumers would no longer have to bear unfair expenses. 

Such as full-service ticket prices shown at the time of purchase, refundable flight cancellations and delays, and prohibitions on families being charged more than one fee for sitting together on airplanes. 

Credit card late fees diminished by 75%. Ending switching fees for mobile phones and internet service providers and capping service fees for concerts and sporting events.

The CFPB’s New Proposal For Consumers: Reduce Junk Fees!

Consumers can’t stand to pay so many “junk fees” anymore. Source: Freepik.

The Consumer Financial Protection Bureau (CFPB) has proposed a new set of rules designed to lower what is known as “junk fees” charged by credit card companies. 

CFPB notes that credit card late fees can reach as high as $41 for subsequent payments. So President Biden proposed cutting them by 75%, from $30 to $8. 

In what is likely to be added consumer relief. The CFPB also recommends removing the yearly inflation adjustment and prohibiting credit card late fees. Totaling more than 25% of what needs to be paid. 

This means reducing what credit card holders are obligated to pay when they are late on their financial obligations from an excessive 100% down to what is much more affordable and tolerable.

Why is the Consumer Finance Protection Bureau considering rule changes for credit card late fees?

The Consumer Finance Protection Bureau (CFPB) is considering rule changes for credit card late fees, which have risen well above what the CARD Act of 2009 determines as “reasonable and proportional.” 

In an effort to bring credit card late fees back in line with these guidelines, the CFPB is urging consumers to submit their comments on the proposed rule change before April 3, 2023. 

This move is part of a broader effort from the agency to reduce what are known as “junk fees,” which many consider an unfair burden on Americans who often make small mistakes during an already difficult financial time. 

Approval of these rule changes could provide much-needed relief to those who are facing high credit card late fees and related costs.

How does inflation affect your credit card balance?

Credit cards can be a great way to make purchases, but there are often hidden extras like “junk fees” that could leave you with an inflated balance. 

Don’t let yourself get stung. Find out how inflation affects cardholders and what steps you should take to prevent unnecessary interest charges by following the link below!

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How does inflation affect your credit card balance

Inflation can impact the amount of interest you owe on your credit card debt. Learn more about how it works and what you can do to keep your debt under control.

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