Study: Credit Card Late Fees Much Higher; 35% Assessed Late Fees
Between 1980 and 2005, the amount that U.S. consumers charged to their cards grew from an estimated $69 billion per year to more than $1.8 trillion, with the number of U.S. credit cards issued to consumers now exceeding 691 million, according to CardWeb.com data. The increased use of credit cards has contributed to an expansion in household debt, which grew from $59 billion in 1980 to roughly $830 billion by the end of 2005. The Federal Reserve estimates that in 2004, the average American household owed about $2,200 in credit card debt, up from about $1,000 in 1992.
According to CardWeb.com, the number of times per month that credit or debit cards were used for purchases or other transactions exceeded 2.3 billion in May 2003, the last month for which the firm reported this data.
The study recommended that the Federal Reserve should revise rules on credit card disclosures to require that they more clearly emphasize penalty fees and rates and what triggers them.
The GAO study was conducted from June 2005 to September 2006. The auditors also interviewed 112 consumers with credit card accounts. The report is available on the GAO Web site at http://www.gao.gov/cgi-bin/getrpt?GAO-06-929