As California cracks down on ‘junk fees’ it’s overlooking a major culprit: credit card companies

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Americans pay more than $25 billion annually in hidden fees when they use credit cards, but the new junk fee rules don't cover these lenders.

Millions of consumers are using credit cards without realizing how fees and interest are adding to their costs. Annual percentage rate data also leaves out some costs. Photo by Mike Blake, ReutersAmericans pay more than $25 billion annually in hidden fees when they use credit cards, but the new junk fee rules don't cover these lenders.a commentary forum aiming to broaden our understanding of the state and spotlight Californians directly impacted by policy or its absence.

The report found that subprime credit cards for consumers with low credit scores are by far the worst for charging borrowers additional junk fees, costing consumers $11.5 billion a year in fees, including annual percentage rates, subscription fees, late fees, fast payment processing fees, application fees, monthly maintenance fees, new card fees and ATM fees. are the second-most costly option, totaling roughly $6 billion in additional fees.

As consumers become more aware of junk fees and the true total cost to borrow, they are more likely to take action and make better informed decisions.

 

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