This Halloween comes with some scary news on the credit card front.
According to the Consumer Financial Protection Bureau (CFPB), Americans now hold a record-setting $1 trillion in credit card debt.
The average credit card user has more than $5000 in outstanding debt.
What’s worse? Americans paid more than $130 billion in credit card interest and fees in 2022.
Nearly $15 billion of that amount was paid in late fees.
The rising burden of late fees (consumers paid $12 billion in late fees in 2020) comes as the CFPB is planning to take action that would cap credit card late fees at $8 a month.
“Over a decade ago, Congress banned excessive credit card late fees, but companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” said CFPB Director Rohit Chopra. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”
In case you are thinking that there is a fintech solution to excessive credit card debt, you’re not wrong. But several short-term lending apps (like Dave, MoneyLion), come with pretty spooky fees.
While the Dave App promises they won’t “ghost” you on Halloween, they will want their money back.
So if you’re looking for a short-term loan on your phone, just know that Dave’s cash-bearing cartoon bear will haunt you long after your Halloween party guests have gone.
One story notes that between fees and tips, a loan from the Dave App can carry triple-digit interest rates.