Perhaps not quite that OK
About 37% of Americans have been charged a late fee on a bill in the last 12 months, according to a new report by NerdWallet.
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Useless without context. What is the average late fee rate over the last several years?
Steve…OK, because he doesn’t consume much
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We do know the low end of the income spectrum is struggling with higher prices than their income increases. Companies routinely tell us consumers are cutting back and being more selective. That trickles down to at least slower growth throughout the economy.
Upper middle class has adequate resources and continues to spend. They are driving the consumer economy. But i notice both Nieman Marcus and Macys are for sale. They are apparently seeing weak sales–maybe from wanna bees who like the fashion shopping but lack the resources.
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More on this. Regulations are being introduced to cut down on junk fees:
Lake’s warning comes due to new financial regulations coming out of Washington, with agencies including the Consumer Financial Protection Bureau proposing an $8 cap on credit-card late payment fees and a $3 cap for overdrafting bank accounts, as well as other regulations such as further limiting debit-card fees and more.
So now they will charge you for banking:
There have been service fees on checking accounts for years. The fees are waived if you have enough loot at the bank.
I have told the story before, how I keep an “emergency” fund savings account, as well as the checking account. Being an “emergency” fund, it doesn’t see a lot of activity. So, the bank froze the savings account, due to low activity. I could not unfreeze the account at the ATM. I had to use a human teller. The bank charged a fee to use a human teller. So I had to pay to unfreeze the account the bank had frozen. And that was nearly 20 years ago.
Steve…realizes Proles are nothing but a ledger entry under “source of funds”.
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$8 for a credit card seems reasonable. $3 for an overdraft does not. I will explain why.
If I am late on my CC and get hit with an $8 fee, the $8 fee is likely the least of my concern because unlike an overdraft, I will be subject to interest owed on the balance of the CC. That is likely to be even more than $8 so there is enough incentive to keep a consumer from doing that behavior very often.
A $3 overdraft fee is frankly too low. If I can write a check for $1,000 and only be hit with a trivial $3 fee if I lack the funds (but perhaps I will have the funds 3 days later), then I will write the check and not sweat the trivial fee. It is not enough of a deterrent to ensure I handle my finances in an appropriate manner.
I don’t claim to know what the correct amount is but I am confident that $3 is too low - especially if it is a one time fee that is not ongoing.