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Lana Linge has $42,000 in credit-card debt, but it's not the giant tab that has her most frustrated.The 29-year-old says she takes full responsibility for her debt. After getting her first credit card in her early 20s, Linge accumulated small amounts of debt but was always able to pay it off. That changed in 2020: Linge struggled with managing her spending on necessities and other items, like clothes, while in isolation, causing her bills to grow. Things got worse after she lost her job this past October, and she eventually depleted her savings to keep up with the payments on her card."I know for a lot of people, they're in debt because of these freak things that are outside of their control," Linge tells me. "The reason that I'm in debt primarily is from overspending, and I don't try and negate that in any way."Overwhelmed, Linge is going through the painful bankruptcy process to discharge the debt. Looking back, she regrets not paying more attention to the details of her card's interest rate. Wooed by the rewards and perks the companies were offering, Linge signed up for a card with an interest rate she says ballooned to over 20%. The growing interest payments meant that even as she worked to get her spending under control, the bills kept growing.Linge's experience may be on the extreme end of America's personal finance journeys, but she isn't alone in her interest-rate woes. Consumers are always looking for deals, and it's easy to be swayed by credit-card companies offering glitzy rewards and points. As Adam Rust, the director of financial services at the Consumer Federation of America, told me, issuers are "putting the sizzle before the steak." But many of these cards come with high rates and hidden fees, and by the time consumers realize just what they signed up for, credit-card companies have raked in the profits."Credit-card companies can get away with charging high rates of interest because consumers aren't necessarily paying attention and marketing doesn't focus on that," he said.The average credit-card interest rate is now just over 21%, up from about 15% a decade ago. More importantly, the gap between the interest rate that credit-card companies pay banks that oversee their business and the one they charge you is the widest it has been in nearly 30 years. Even with existing regulations and the recent interest-rate cuts from the Federal Reserve, credit-card companies have the power to exploit consumers, and people with growing debt piles have few avenues for relief. Additionally, as credit-card companies continue to charge high interest rates, more cardholders in debt become delinquent — and that could push the US economy closer to recession."What we're seeing from the data shows a rapidly deteriorating financial landscape for Americans," Bruce McClary, a senior vice president at the National Foundation for Credit Counseling, tells me, "with a lot of people teetering on the brink of severe financial crisis."<h2 id="ddbac9bc-8e83-4317-902e-7a4e1408e665">The squeeze is on</h2>Americans have a lot of debt piled up on their little pieces of plastic. The Federal Reserve Bank of New York said in August that Americans owed a record $1.14 trillion on their credit cards in the second quarter and that balances increased by $27 billion from the same period a year ago, a 5.8% jump. TransUnion says the average credit-card balance per debtor stands at $6,329, up by 4.8% from a year ago. Most worryingly, according to the New York Fed, the percentage of people who had fallen more than 90 days behind on their payments climbed to 6.4% by the end of 2023, up from 4% at the end of 2022. Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, described those rising delinquencies as "uncomfortably high" and a "warning sign" for the economy.This may be worrying news for average households and the US economy, but it is wonderful news for the credit-card companies. Credit-card issuers make money in a few ways, but one of the most important is interest payments. When a customer doesn't pay off their full balance each month, they pay interest that the credit-card company collects, so increasing interest rates is an easy way to bring in more profit. To better understand the strength of the credit-card industry, look at the split between the federal funds rate — the interest rate at which banks make very short-term loans to each other, which is also used as the benchmark for almost every other type of loan — and the average credit-card interest rate. Data from the St. Louis Federal Reserve indicates the difference between the rates is at a nearly three-decade high, suggesting credit-card companies feel free to charge high interest rates regardless of what the Federal Reserve does with the federal funds rate."We should never lose sight of just how profitable credit cards are," Rust says. "You've got interest, you've got interchange, you've got late fees; credit-card companies are making so much money."The Consumer Financial Protection Bureau estimated in February that major credit-card companies earned about $25 billion in additional interest revenue in 2023 by raising their annual-percentage-rate margins, or the difference between the APR and the interest rate set by banks, known as the prime rate. It also found that major issuers raised the average margin by 4.3 percentage points over the past decade, to an all-time high. Using data on how Americans deploy their cards to paint a representative picture, the CFPB estimated that the margin increase cost the average consumer with a balance of $5,300 more than $250 in 2023. On top of that, the bureau's 2023 report to Congress on the credit-card market said companies charged consumers over $105 billion in interest in 2022, helping boost the profit margin for these companies to 5.9% from 4.5% in 2019.These staggering numbers are made possible by the tactics that credit-card companies use to lure in new customers. Antoinette Schoar, an economist at MIT who coauthored a paper examining credit-card companies' use of behavioral biases to acquire customers, says companies use data to determine a prospective customer's education and income levels and will tend to offer products with hidden fees and high rates to people with lower educational attainment and income. For example, a company might advertise a 0% APR, but the consumer might not realize that that rate can't last forever, leading them to take on balances higher than they can afford to pay off. She says that while the tactics companies use to appeal to certain consumers can lead to high balances and credit-card debt, the companies aren't the only ones to blame — government regulations to prevent this kind of misleading marketing by credit-card companies could force the companies to compete by offering customers a better deal."We need better regulation so that the card companies are competing on the right dimensions and not on increasing convolution or increasing confusion to their customers," Schoar says.<h2 id="a19bffcc-ffc0-46bd-9211-4a8e68d3409d">'The highest credit-card rates we've ever seen'</h2>Until 1978, most states had laws capping interest rates for credit cards and consumer products. But a Supreme Court decision that year allowed banks to charge whatever interest rate they wanted if they were headquartered in a state without a usury law. This inspired a race to the bottom, with states like South Dakota and Delaware doing away with their laws in order to attract more business from banks. The industry ended up with, as David Silberman, a senior fellow for the Center for Responsible Lending, put it, virtually "no legal constraints on the interest rate they charge." Lawmakers have tried to rein in the industry — for instance, the CARD Act, enacted in 2009, required card issuers to notify consumers of interest-rate increases at least 45 days in advance and put restrictions on things like late fees and withdrawal fees. The legislation, however, didn't cap interest rates or rate increases. Lowering the current high interest rates, and the profits that come with them, has become a priority across the aisle. GOP Sen. Josh Hawley introduced a bill in 2023 that would cap interest rates at 18% and impose penalties on companies that violate the cap. "Americans are being crushed under the weight of record credit card debt—and the biggest banks are just getting richer," Hawley said in a statement, adding that "capping the maximum credit card interest rate is fair, common-sense, and gives the working class a chance." Democratic Sen. Elizabeth Warren brought up the issue during a Senate hearing in May, saying credit-card companies had "grown their profits through interest and fees."The Federal Reserve cut its benchmark interest rate in September after holding it steady for over a year, but credit-card holders with high interest rates won't feel any relief off the bat. Michele Raneri, a vice president and head of US research and consulting at TransUnion, told me that's because consumers have to pay off their balances at the interest rate in place when they accumulated the debt, so the lower rate wouldn't apply."It'll take a while for the consumer to realize the benefit of it," Ranieri says.The high inflation of the past few years has also made it easier for consumers to fall into credit-card debt. Ted Rossman, a senior industry analyst at Bankrate, described the feedback loop of high prices and high interest rates as "a tough cycle to break." Credit-card companies know what they need to do to maximize profit: If they offer rewards and bonuses up front, they can snag new customers before they realize the high rates they're signing up for. Profits keep rolling in for issuers, while consumers fall further behind.<a target="_blank" rel="" href="https://www.businessinsider.com/author/ayelet-sheffey">Ayelet Sheffey</a> is a senior economic policy reporter on Business Insider's economy team.

Credit card companies are ripping you off like never before

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<ul class="summary-list"><li>Visa and Mastercard settled a dispute with US retailers over credit-card swipe fees.</li><li>The settlement could ultimately affect credit-card reward programs.</li></ul>One of the great American pastimes — using your credit card to accumulate points — could be about to change.On Tuesday, <a target="_blank" href="https://www.businessinsider.com/visa-mastercard-lawsuit-settlement-credit-card-fees-checkout-2024-3">Visa and Mastercard settled with US retailers</a> over a long-standing dispute tied to credit-card swipe fees.The crux of the issue is interchange fees, which networks such as Visa and Mastercard charge merchants for processing their transactions. Under the agreement, which still needs to be approved by the courts, these fees would be lowered and capped for five years.So what does that have to do with your sacred stash of points?Even though the networks set interchange fees, the card issuers (banks such as JPMorgan Chase and Bank of America) get the lion's share of the revenue. <a target="_blank" rel=" nofollow" href="https://www.bloomberg.com/news/articles/2024-03-26/visa-mastercard-reach-30-billion-swipe-fee-deal-with-merchants">Bloomberg</a> reported that last year, JPMorgan took home $31 billion of interchange and merchant-processing income.Again, you ask, what does that have to do with my points?Well, a good chunk of that revenue is spent by banks encouraging you to use their fancy cards. And the best way to do that is via points and rewards. Cards with better rewards and cash-back economics typically charge higher interchange fees.Which gets us back to Tuesday's settlement. Merchants have to accept all types of credit cards from Visa and Mastercard under an "honor all cards" rule. But now, they'd be able to charge consumers more depending on the type of card they're using.Suddenly, the cash back you get from your Chase Sapphire Reserve doesn't seem as enticing when paying a premium on the bacon-egg-and-cheese sandwich at your local bodega.It's not likely that banks will completely punt on rewards. David Morris, a principal analyst for payments at eMarketer, said the card programs were too important for banks to stop engaging those customers."They can make allowances of their own in terms of the kinds of rewards, adjusting the rewards accordingly. These are highly profitable programs, so there is some flexibility here for the card companies to be able to make some adjustments along those lines," he said.Morris acknowledged that some changes in consumer behavior might occur as a result, "but that would discount the levers that these credit-card issuers do have to be able to ensure that they are providing the card value that premium cardholders expect."Merchants, especially retailers, don't seem pleased with the settlement. The National Retail Federation, which represents chains including big-box stores and supermarkets, said it "amounts to pennies on the dollar" toward their costs. And the Retail Industry Leaders Association called it "a mere drop in the bucket."Both trade groups expressed support on Tuesday for the Credit Card Competition Act before Congress, which would require large banks to offer multiple payment networks for processing transactions through their credit cards.While many small businesses already charge an extra fee for those paying with a credit card, David Silverman, a senior director at Fitch Ratings, said most major retailers wouldn't pass the interchange costs directly to consumers."These retailers have been absorbing costs across any number of cost functions," such as labor, he said.It's not yet clear what impact the settlement will have. The agreement hasn't yet been approved, and time will tell how merchants and banks handle the changes.But the points game can be one of fine margins, and a change to interchange fees could have ripple effects for rewards programs.Don't be surprised if it starts taking a lot longer to rack up the points required for your next getaway.Correction: March 27, 2024 — An earlier version of this story misstated a detail from a Bloomberg report. Bloomberg reported that JPMorgan alone took home $31 billion of interchange and merchant-processing income last year, not that the biggest US banks took home this sum.

Credit-card points might be entering a new era

The offers and details on this page may have updated or changed since the time of publication. See our article on <a href="https://www.businessinsider.com/how-credit-cards-save-me-thousands-on-travel-2024-8" target="_blank">Business Insider</a> for current information.<ul class="summary-list"><li>I'm a frequent traveler spending $1,300 a year on credit card fees to get great perks. </li><li><a href="https://www.businessinsider.com/personal-finance/american-express-platinum-credit-card-review">The Platinum Card® from American Express</a> saves me money with its complimentary Priority Pass membership.</li></ul>I used to think that paying an annual fee for a credit card was a terrible idea and a waste of money. For years, I prided myself on using <a href="https://www.businessinsider.com/personal-finance/credit-cards/best-no-fee-credit-card">no-fee credit cards</a> that offered a small amount of <a href="https://www.businessinsider.com/personal-finance/credit-cards/best-cash-back-credit-cards">cash back</a> on purchases. But I changed my mind once I started traveling more and learning about the perks some credit cards offered.I dove in head first. This year I've spent about $1,300 on annual fees. Most of the fees are worth every penny and have easily paid for themselves, though there are some I'm not sure about. Here are my <a href="https://www.businessinsider.com/favorite-credit-card-perks-frequent-traveler-2024-7">favorite travel card perks</a>, plus a few I've enjoyed but would be OK losing. <h2>I love having airport-lounge access and travel upgrades</h2>My <a href="https://www.businessinsider.com/personal-finance/credit-cards/amex-business-platinum-card-review"></a><a href="https://www.businessinsider.com/personal-finance/credit-cards/amex-business-platinum-card-review">American Express Business Platinum</a> <a href="https://www.businessinsider.com/personal-finance/credit-cards/amex-business-platinum-card-review"></a>comes with a hard-to-swallow $695 annual fee, but the perks have more than outweighed the cost. For context, I'm a freelance writer and use this card for expenses associated with my business, but American Express offers a <a href="https://www.americanexpress.com/us/credit-cards/card/platinum/?s_stlnk=CS_Test_Plat_4.12.24&amp;utm_mcid=&amp;utm_source=google&amp;utm_medium=cpc&amp;utm_term=%2Bamerican+%2Bexpress+%2Bplatinum&amp;utm_cmpid=21211613033&amp;utm_adgid=142828790300&amp;utm_tgtid=kwd-383918391531&amp;utm_mt=p&amp;utm_adid=703411312682&amp;utm_dvc=c&amp;utm_ntwk=g&amp;utm_adpos=&amp;utm_plcmnt=&amp;utm_locphysid=9007537&amp;utm_locintid=&amp;utm_feeditemid=&amp;utm_devicemdl=&amp;utm_plcmnttgt=&amp;utm_programname=brandcps&amp;utm_cmp=Platinum&amp;utm_sl=&amp;gclid=CjwKCAjwnK60BhA9EiwAmpHZw0IzIjTZihCfICjEFqbYrlNo64dRJwmOPmozqwz45-NBNN3umc8DHxoCd4gQAvD_BwE&amp;eep=28810&amp;utm_misc=cardshop" target="_blank" rel="noopener">personal version</a> that's very similar.I've used this card's benefits to get <a href="https://www.businessinsider.com/personal-finance/credit-cards/clear-airport-security">CLEAR</a> and <a href="https://www.businessinsider.com/personal-finance/credit-cards/best-global-entry-tsa-precheck-credit-card">Global Entry</a>, both of which have helped me speed through security lines at airports. It got me an automatic upgrade to <a href="https://www.businessinsider.com/personal-finance/credit-cards/how-to-earn-redeem-hilton-honors-points">Hilton Honors</a> Gold elite status, which has scored me free breakfast and room upgrades throughout my travels. However, my favorite perk of this card is my free <a href="https://www.businessinsider.com/personal-finance/credit-cards/how-to-get-priority-pass-for-free">Priority Pass</a> membership. With it, I've gained access to several airport lounges for myself and up to two travel companions, usually my children.This benefit alone has saved me hundreds of dollars since I no longer have to buy pricey food at the airport — most lounges offer plenty of it for free. Plus, lounge access has made long travel days and layovers so much easier. I wish I had gotten this card sooner. <h2>Being able to avoid foreign transaction fees has saved me a lot of money</h2>The first credit card I applied for with an annual fee is the <a href="https://creditcards.chase.com/a1/24Q3/sapphire/dual?CELL=6D4C&amp;jp_cmp=cc/Sapphire+Preferred_Brand_Exact_Sapphire+Preferred_SEM_US_NA_Standard_NA/sea/p56274819573/Chase+Sapphire+Preferred&amp;gclsrc=aw.ds&amp;ds_rl=1253080&amp;gad_source=1&amp;gclid=CjwKCAjwnK60BhA9EiwAmpHZw2RFN6PLXS_Pd4E6N_kWGXSjbA1p81Z5g46aBhQkqNhsnB2L5vgYZhoC8Y4QAvD_BwE&amp;gclsrc=aw.ds" target="_blank" rel="noopener"></a><a href="https://www.businessinsider.com/personal-finance/chase-sapphire-preferred-card-review">Chase Sapphire Preferred® Card</a>, which has a $95 annual fee. Many of my cards charge up to 3% for every transaction made in a currency other than US dollars, but this one doesn't. <a href="https://www.businessinsider.com/personal-finance/credit-cards/what-is-foreign-transaction-fee">Foreign transaction fees</a> can add up quickly, even on a short trip. Because I take a couple of international trips a year, the $95 annual fee more than pays for itself. The <a href="https://www.businessinsider.com/personal-finance/chase-sapphire-preferred-card-review">Chase Sapphire Preferred® Card</a> also has other money-saving perks for travelers I like, including competitive <a href="https://www.businessinsider.com/personal-finance/travel-insurance/travel-insurance-vs-credit-card">travel insurance</a> and <a href="https://www.businessinsider.com/personal-finance/auto-insurance/what-is-rental-car-insurance">car-rental insurance</a> for trips charged to the card. Although my <a href="https://www.businessinsider.com/personal-finance/credit-cards/amex-business-platinum-card-review">Amex Business Platinum</a> also provides fee-free foreign transactions and travel insurance, American Express isn't as widely accepted internationally. I've had <a href="https://www.businessinsider.com/personal-finance/credit-cards/best-chase-card">Chase credit cards</a> accepted almost everywhere I've traveled so I will keep this one in my wallet. <h2>I paid several hundred dollars to get an Amex Gold, but I got points galore </h2><div type="image" title="The bar at the Delta One lounge with black high top chairs." height="3024" width="4032" msid="112720766" hostid="261" sizebytes="943274"></div>I applied for an <a href="https://creditcard.americanexpress.com/d/business-gold-card/?s_stlnk=23WelcomeOffer&amp;utm_mcid=&amp;utm_source=google&amp;utm_medium=cpc&amp;utm_term=%2Bamerican%20%2Bexpress%20%2Bbusiness%20%2Bgold&amp;utm_cmpid=21422559996&amp;utm_adgid=170920140424&amp;utm_tgtid=kwd-707750570877&amp;utm_mt=p&amp;utm_adid=695113361185&amp;utm_dvc=c&amp;utm_ntwk=g&amp;utm_plcmnt=&amp;utm_locphysid=9007537&amp;utm_locintid=&amp;utm_feeditemid=&amp;utm_devicemdl=&amp;utm_plcmnttgt=&amp;utm_ltpcid=CjwKCAjwnK60BhA9EiwAmpHZw-_dU_STCnbf2AlVEPaJelCH5fK1yVPArCw6-X9Tg9n8-NzLqCGoaxoCHHsQAvD_BwE&amp;utm_programname=brandproductspecific&amp;utm_cmp=GoldTermsSMB&amp;gclid=CjwKCAjwnK60BhA9EiwAmpHZw-_dU_STCnbf2AlVEPaJelCH5fK1yVPArCw6-X9Tg9n8-NzLqCGoaxoCHHsQAvD_BwE" target="_blank" rel="noopener"></a><a href="https://www.businessinsider.com/personal-finance/amex-business-gold-card-review">American Express® Business Gold Card</a> card when the company ran one of its rare promotions offering 150,000 points as a sign-up bonus. The card's $375 annual fee is high, but the generous sign-up bonus more than made up for it for me.I have several international trips planned this year, and I expect that the 150,000 points I plan to redeem for airline tickets will easily save me at least triple the annual fee. For example, a ticket on a flight I'm eyeing to New Delhi from Washington, DC, costs $1,488 and is 148,000 points.With this card, I also receive monthly statement credits — up to $20 a month — offsetting more than half of the annual fee I paid. However, it's a pain to keep track of earning the monthly credit, and the card's other benefits aren't that valuable to me.I probably won't keep this card for a second year since American Express offers a <a href="https://www.americanexpress.com/us/credit-cards/card/gold-card/?utm_mcid=&amp;utm_source=google&amp;utm_medium=cpc&amp;utm_term=%2Bamerican+%2Bexpress+%2Bgold&amp;utm_cmpid=21215159479&amp;utm_adgid=141451150545&amp;utm_tgtid=kwd-378783604257&amp;utm_mt=p&amp;utm_adid=688797561785&amp;utm_dvc=c&amp;utm_ntwk=g&amp;utm_adpos=&amp;utm_plcmnt=&amp;utm_locphysid=9007537&amp;utm_locintid=&amp;utm_feeditemid=&amp;utm_devicemdl=&amp;utm_plcmnttgt=&amp;utm_programname=brandcps&amp;utm_cmp=Gold&amp;utm_sl=&amp;gclid=CjwKCAjwnK60BhA9EiwAmpHZwwBO9FJLMLIaV_rtDd4b73g6qijaQ1295HWyR5scWwkpNerBJ-G0XxoCYB4QAvD_BwE&amp;eep=28810&amp;utm_misc=cardshop" target="_blank" rel="noopener">personal version of it</a> with similar perks and a lower annual fee.<h2>Priority boarding has been nice, but not quite worth the price</h2>I'm a frequent flyer on United but have never accrued enough points to gain status with the airline. To get more perks on United, I applied for a <a href="https://fortune.com/recommends/credit-cards/united-explorer-card-review/" target="_blank" rel="noopener"></a><a href="https://www.businessinsider.com/personal-finance/united-explorer-card-review">United℠ Explorer Card</a> card, which doesn't charge an annual fee for the first year ($0 intro for the first year, then $95 annually in subsequent years). My favorite perk of this card is priority boarding. Combined with other perks like single-entry passes to <a href="https://www.businessinsider.com/see-inside-uniteds-new-41-million-polaris-lounge-washington-dulles-2022-3">United Club lounges</a> and free checked bags, I thought this card was a good value. However, I now get lounge access and credit for checked bags with my <a href="https://www.businessinsider.com/personal-finance/credit-cards/amex-business-platinum-card-review">Amex Business Platinum</a>, and I don't think priority boarding is valuable enough to make up for the annual fee. I would also rather earn points that can be transferred to several airlines and hotels rather than being locked into United. I plan on canceling this card when the next annual fee comes due, but I might reapply if I find that I miss priority boarding a lot.

I spend $1,300 a year on credit-card fees to get big travel perks. Here are ones I swear by and which I won't pay for again.

The offers and details on this page may have updated or changed since the time of publication. See our article on <a href="https://www.businessinsider.com/paid-off-credit-card-debt-solid-plan-2024-6" target="_blank">Business Insider</a> for current information.<ul class="summary-list"><li>At the beginning of the year, I was facing nearly $30,000 in credit-card debt.</li><li>I made a budget to pay it off in 18 months, but a big project let me pay off most of it in just one.</li></ul>When December ticked into January, I knew it was time to face something I had been putting off: my credit-card debt. When I added it up, it was even worse than I'd thought. I owed $29,357, and my monthly payments alone were approaching $1,000.If I were reading about this happening to anyone else, I'd probably think, "How did that happen?" The truth is, it was just too easy. I wasn't dining out regularly, shopping impulsively, or doing anything extravagant. I racked up most of the debt improving my house, which I bought as a foreclosure in need of serious repairs. Another major chunk was from a bucket-list trip to Italy with my sister and cousins for a wedding.I didn't regret either of those things, but I was starting to feel suffocated. I vowed to <a href="https://www.businessinsider.com/personal-finance/how-to-pay-off-debt-fast">pay off my debt</a> as aggressively as I could.<h2>I realized I was undermining my financial security</h2>I've been freelancing for more than a decade, and I believe there's a lot of job security in being a contractor. If one client goes under, I can find another. Yet at the start of this year, I barely had any work.This compounded my stress about my credit-card debt. A major change in my workflow could make it impossible to keep up with even the minimum payments. That much debt could easily snowball and overwhelm me, flattening my plans for a stable financial future.Over the past five years, I've worked hard to create a stable career — and eventual retirement — as a freelancer. To me, that means being able to pay for my needs and wants comfortably while doing the type of work I love. I save monthly for <a href="https://www.businessinsider.com/personal-finance/retirement">retirement</a> and budget diligently for quarterly taxes. I felt frustrated with myself when I realized I was leaking money on credit-card interest when it would otherwise help build my security.<h2>I made a budget and planned to pay off the cards in 18 months</h2>My resolve was strong, but I was still overwhelmed by the sheer amount of debt. I thought about a home-equity loan, but I didn't want to change unsecured debt for a loan that put my home on the line.Instead, I put together a budget — something I'd been good about sticking to in the past — and laid out all my household expenses. With my low January income, I would just meet them. I decided to do a no-spend month, where I didn't purchase anything but essentials — not even coffee. I stopped using the cards and canceled any automatic charges and subscriptions linked to them.I planned to stick to my <a href="https://www.businessinsider.com/personal-finance/best-budgeting-apps">budget</a> and direct any extra income toward my debt. I thought it would take me about 18 months, which made me think twice about how much I really needed that trip to Italy or the new floors.<h2>An unexpected project gave me a huge boost</h2>I stuck to that plan for the first few weeks of the year. Then, in February, I had a huge windfall. An occasional client explained they had a massive project that needed to be finished that month. At first, I thought it would be about $5,000 of extra income, and I was thrilled to be able to pay off a chunk of my debt.As the month went on, the project ramped up instead of slowing down, and I worked long hours daily. I felt glued to my computer, but by the end of the month, I had made almost $25,000 more than in a typical month. It all went to my credit cards.<h2>I feel like I have a clean slate and a better understanding of my financial goals</h2>Getting that project felt like a gift — a chance to right the wrong choices I'd made financially. I had $5,000 in credit-card debt left after that, and I'm following my budget to pay that off. That feels like a much more manageable amount, and I'll be able to pay it off this year.Now, I'm determined to use my clean slate to set up a solid financial future, not one built on debt. I'm already planning to increase the amount of money I put in my <a href="https://www.businessinsider.com/personal-finance/best-retirement-plans">retirement plan</a> and tackle my remaining <a href="https://www.businessinsider.com/personal-finance/best-private-student-loans">student loans</a> next year.Like most millennials, I can get distracted by the shiny spend-now, pay-later promise of credit cards. But after feeling overwhelmed by them and being lucky enough to escape, I know that the real goal is a future where I'm financially stable enough to fit major expenses into my cash flow, including the travel and home improvements that almost took me down.

After paying $25,000 of credit-card debt, I'm ready to make the most of my clean slate

Best Business Credit Cards of January 2024

Worried about your <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-score/what-is-a-credit-score">credit score</a>? Maybe you weren't before, but now that I mention it you may be wondering when the last time you checked it was. Even if you're pretty sure it's fine, the topic is often enough to <a target="_blank" href="https://www.businessinsider.com/financial-therapist-talk-about-anxiety-money-2023-3">cause a moment of panic</a>, a sinking feeling followed by an "Oh God, what if something's happened?"That little three-digit number is a big deal in our financial lives. It serves as a sort of grade for how you handle money. An A gets you approval for an apartment and a decent rate on your car loan; an F gets your rental application turned down and makes your car insurance more expensive. You might not have even realized it, but your credit report <a target="_blank" href="https://www.businessinsider.com/why-cleaning-up-your-credit-can-help-you-land-a-job-2013-9">could even make a difference in whether you land your next job</a>.The anxiety around credit scores is palpable. It's also lucrative. Credit bureaus, startups, and even one-man operations can make a lot of money by playing into people's fears about their credit. They offer services that monitor credit scores and alert you when yours changes, or they say they can help you repair your damaged credit — for a price, of course. Many of these costly solutions do not work as well as promised or deliver much, if any, bang for your buck."The credit-scoring companies have figured out how to profit on the anxiety of consumers with credit watch and credit monitoring and all of these add-on programs," said Aaron Klein, a senior fellow in economic studies at the Brookings Institution, a nonpartisan think tank. "When companies find a way to profit off of anxiety, they have an incentive to create anxiety."What these companies won't tell you is that the best things to help ease your credit-related worries are cheap, even free. You can check your credit regularly at no cost from a lot of sources — your credit-card company likely tells you your score, and you can access your report weekly free of charge too. Freezing your credit also doesn't run you anything. It's important to be aware of your credit score, but you don't need to obsess over it — or let marketers convince you to pay for a bunch of stuff you don't really need because you're panicked.Around the time of the Super Bowl, I noticed that the Kansas City Chiefs tight end Travis Kelce was appearing in ads for Experian, one of the big three bureaus responsible for keeping track of everyone's credit scores. I <a target="_blank" href="https://www.businessinsider.com/travis-kelce-experian-tv-commercials-nfl-taylor-swift-super-bowl-2024-2">decided to write about it</a> and, in the process, created an Experian account. The company has been hounding me ever since. I get near-daily emails that range from run-of-the-mill product offers and "credit alerts" to nerve-racking warnings that my information may have been part of a data breach. When I click for more information, lo and behold, I'm confronted with a paid service. For $25 a month, I can sign up for "Experian CreditWorks Premium," which includes quarterly credit reports, credit monitoring, and identity protection. Once I decline that offer, which is kind of tricky, I can also find an offer to "lock" my credit for $5 a month. It's similar to a credit freeze, which blocks creditors from accessing your credit file, but can also do things like notify you if someone tries to access your Experian credit report. Here's the thing, though: A lot of the services it's offering are already free."There's no reason ever to pay for credit monitoring," said Chi Chi Wu, a senior attorney at the National Consumer Law Center. "There's no reason to pay for a credit score or pay for service for the credit score."In Wu's view, Experian is an especially bad offender — not just for its suite of likely unnecessary products but because, as part of its standard agreement, the company makes customers agree to mandatory arbitration, meaning you don't get to sue if Experian has a big screwup later. In an email, a spokesperson for Experian said that the company is "committed to financial inclusion" and that its free membership has tools to help consumers improve their financial health. "Millions of members find value in having Experian as their financial co-pilot helping them improve, manage, and protect their financial profile," the spokesperson said. They did not address the arbitration agreement. But Experian is hardly the only company out there selling credit-related services that drain consumer dollars. The credit-monitoring and identity-theft-protection industry, according to IBISWorld, is worth about $5.4 billion in annual revenue. The growth of the industry makes sense — in this day and age, data breaches are constant, and a fraudulent ding on your credit report or someone opening an account in your name can be an enormous headache. Guarding against that outcome seems like a small price to pay for a lot of people, except that paying any price above $0 may not actually be worth it.A <a target="_blank" href="https://www.nclc.org/wp-content/uploads/2022/09/IB_Credit_Monitoring_Arbitration.pdf">2022 brief</a> from the NCLC described credit-monitoring bundles as often "expensive and ineffective" and argued that they failed to meaningfully benefit consumers. It noted that most identity theft takes place in existing accounts, meaning monitoring services that alert consumers to newly opened accounts miss it. They also often fail to catch fraud related to medical services or tax refunds. And even when they do catch identity theft, they do so after the fact."Some people might be like, 'Well, I'd rather pay and not deal with the time,'" Wu said. "But the thing is those products aren't all that effective."A <a target="_blank" href="https://www.gao.gov/assets/gao-17-254.pdf">2017 report from the Government Accountability Office</a> was pretty negative on the whole monitoring and identity-theft-protection business, too, saying it's just not clear how helpful a lot of this stuff is. The report also looked at identity-theft insurance and noted that while it covered expenses related to dealing with the theft, it generally excluded actual financial losses. While credit monitoring falls into the waste-of-money category, other credit-related services can cross over into potentially predatory territory — for example, credit-repair operations. The idea behind these services is pretty simple: Credit reports often include some mistakes that can ding people's scores. So, for a fee, the companies will dispute a bunch of items in hopes of boosting the score. This may improve people's reports temporarily while the disputes are being investigated, but since the firms are basically disputing anything negative, when they lose, everything goes back to how it was, and the customer is just out more money."They're basically charging people with the false promise that they're going to be able to fix their credit reports and credit scores permanently when they can't," said Sarah Chenven, the CEO of Working Credit, a nonprofit that helps people build credit.Credit-repair companies often target people with lower incomes and people desperate to improve their credit reports and scores. Gen Zers and millennials, who <a target="_blank" href="https://www.creditkarma.com/insights/i/state-of-debt-and-credit-report#average-credit-scores">tend to have lower credit scores</a> than older generations and may not have extensive credit files, may be more likely to find themselves looking at a credit-repair service to get negative items off their reports or at some sort of credit-building service to just help them develop a record. Credit-monitoring companies can really appeal to anyone worried about their credit and identity theft. Some of these businesses also make money by marketing various financial products to people — a well-off boomer might get one type of credit-card offer, a struggling student another.The companies also don't do anything people can't do on their own — if there's an error, you can and should dispute it yourself. In fact, credit-repair agencies can be less effective than the average person at getting mistakes wiped from their credit histories because, as Andrew Pizor, a senior attorney at the NCLC, explained, the law says that credit-reporting agencies have to respond only to dispute letters directly from consumers. Credit-repair businesses try really hard to make it seem like disputes are from consumers, and the agencies try just as hard to sniff out whether that's going on."Most of the letters that you're paying for are going into the garbage," Pizor said. He added that if your dispute letters are going unanswered, you don't need a repair service — you need a lawyer.Federal regulators have gone after several companies accused of playing it fast and loose with the way they approach consumers. In 2017, the Consumer Financial Protection Bureau settled with TransUnion over charges related to how it was marketing its products, including credit monitoring, and ordered it to stop deceptive practices. In 2022, it sued TransUnion, accusing it of violating that order. In 2005, it dinged Experian for marketing free credit reports that weren't so free. Last year, the CFPB entered into a $2.7 billion settlement with a ring of credit-repair brands accused of illegally collecting fees for their services. Over a decade ago, the Federal Trade Commission and 35 states reached a $12 million settlement with LifeLock after alleging that it had made false claims about its identity-theft-protection services.These companies and credit-related services aren't necessarily evil. A significant part of the issue is that the ecosystem is a mess. Our credit-reporting and -scoring system is outdated and confusing, and so are a lot of the businesses that have sprung from it. Even the seemingly good products and services out there are a sign of the deep rot at the core of the whole system. Credit-building loans, which are loans designed to help people without much credit history build some, <a target="_blank" href="https://www.consumerfinance.gov/data-research/research-reports/targeting-credit-builder-loans/">can help people get on better financial footing</a>, even if there is usually some cost involved. Immigrants and young people in particular can benefit.Companies such as Credit Karma that let you access a lot of your information easily and for free make it so your credit score isn't such a mystery. The downside there is that they make their money by giving your information to a bunch of third-party financial products and taking a cut if you sign up for one of them. For consumers, the whole thing feels like a maze. It's tough to separate the good actors from the bad and to understand the trade-offs at hand. It's not always clear what you're signing up for, whether you need it, or what you're going to wind up paying."The credit system and the financial system, and I hate to sound a little preachy, but it's a black box," said Ryan Steckler, a vice president of product and general manager at Credit Karma. "Given that situation, we're in the business of empowering our consumers by giving them access to the same data those financial institutions have."It would be neat to be able to say that some concrete help is on the way, but the truth is we're stuck with some not-so-fun realities around credit scores for the foreseeable future. As screwed up as the system is, it's probably not going anywhere anytime soon, <a target="_blank" href="https://www.investopedia.com/terms/c/cash-flow-underwriting.asp">even though there are better alternatives out there</a>.There is this sense of existential dread around credit scores. A negative one can really drag people down. An impaired record makes loans more expensive, makes accessing certain financial products impossible, and may even put your next apartment or job out of reach. Klein, from the Brookings Institution, has recently been conducting focus groups with low-income consumers about their financial knowledge and concerns. He's been shocked at how much credit scores have come up."I was very surprised at the attention to detail folks of more modest income have on the impact of financial products and choices on their credit scores," he said. "The more I thought about it, the more I realized this focus is based on experience. At some point, their low credit score has negatively impacted their lives."Frederick Wherry, a Princeton sociologist who leads the Debt Collection Lab, an initiative focused on understanding debt collection, added: "As soon as we are asked about our credit scores, or in a moment when we can't get something we need or we get it at too high a price, that's when we realize that this thing has been hanging over our heads." It's unwise to bury your head in the sand, ignore your credit score, and hope for the best. But you don't need to obsess over it, let alone spend a bunch of money on it. If you're not in the market for a house or apartment or in need of a new loan, you can freeze your credit for free, meaning no fraudsters can take out a loan in your name. Under federal law, the bureaus have to give you one free credit report a year, and since the pandemic they've been letting people access their reports for free once a week. If you see something weird on your report, you can dispute it on your own. And you really do not need to be checking that much — once a month or once a quarter is fine, kind of like your 401(k)."If you have a credit score over 720 or 780, stop worrying. Don't be obsessed with getting an 800 or 820," Wu said. "This is not your SAT score."If you're in trouble, there are nonprofits out there that can help you figure out what to do, for little or no money."If you've got bad credit, if your credit score is low, where I'd start is with a nonprofit credit counselor," Pizor said.If you want to sign up for identity-theft protection or credit monitoring, fine. But those services aren't a fail-safe, so you'll want to walk in with your eyes wide open. The credit experts I spoke with were very wary about credit repair across the board. The next time you start to worry about your credit score, take a beat. Not to get too woo-woo here, but really, there's only so much you can control."I mean, the magic bullet is building a better system," Wu said.<a target="_blank" href="https://www.businessinsider.com/author/emily-stewart">Emily Stewart</a> is a senior correspondent at Business Insider, writing about business and the economy.

The best way to fix your credit score? Ignore it.

The offers and details on this page may have updated or changed since the time of publication. See our article on <a href="https://www.businessinsider.com/chase-united-explorer-card-perks-annual-fee-worth-it-2024-7" target="_blank">Business Insider</a> for current information.<ul class="summary-list"><li>As a <a href="https://www.businessinsider.com/best-us-states-to-visit-according-to-frequent-traveler">frequent traveler</a>, I rely on travel credit cards to save money and earn rewards. </li><li>I love using my Chase United℠ Explorer Card, which comes with a $0 intro for the first year, then $95 annual fee.</li></ul>Travel credit cards are hotter than ever, with <a href="https://www.nerdwallet.com/article/travel/how-the-41-of-americans-with-a-travel-credit-card-can-boost-rewards" target="_blank" rel="noopener">over 41% of Americans</a> having a card that provides travel rewards. However, with many cards offering lounge access, statement credits, and travel insurance, some cards' annual fees have climbed to nearly $700 a year. As a frequent traveler, I have and use a <a href="https://www.businessinsider.com/american-express-platinum-card-perks-annual-fee-worth-it-2024-5">credit card with a high annual fee</a>. However, I've paired it with the United℠ Explorer Card, which has a much lower annual fee of $0 intro for the first year, then $95.This card, included in Business Insider's guide to the <a href="https://www.businessinsider.com/personal-finance/best-airline-credit-cards">best airline credit cards</a>, offers a surprisingly robust number of benefits, from priority boarding on United flights to statement credits that can be redeemed for a DashPass membership.Here are some of the perks I get from using my <a href="https://www.businessinsider.com/personal-finance/united-explorer-card-review">United℠ Explorer Card</a>.<h2>As a United℠ Explorer Card cardholder, I always get priority boarding</h2>Some travelers may not care which boarding group they're in, but I am not one of them. Whether I'm <a href="https://www.businessinsider.com/how-i-pack-only-carry-on-month-long-trip-packing-tips-2023">traveling with a carry-on</a> and want to ensure I have space in the overhead compartment or just want to get myself situated and comfortable before a flight, boarding in a priority group is important to me. As a United℠ Explorer Card cardholder, I am always in a priority-boarding group. <h2>Every four years, I get a statement credit of up to $100 for TSA PreCheck, Global Entry, or NEXUS </h2><div type="image" title="Signs on flags in an airport that say &quot;TSA Precheck&quot; and &quot;Enter here,&quot; in front of roped lines." height="750" width="1000" msid="111815695" hostid="261" sizebytes="66222"></div>Although traveling can be a test of patience, I've found that having an expedited security process can make the experience much smoother. That's why I love that my United℠ Explorer Card reimburses me for services like TSA PreCheck, Global Entry, and NEXUS.I've traveled with <a href="https://www.insider.com/why-get-tsa-precheck-2018-11">TSA PreCheck</a> for years, and recently became a Global Entry member (which includes PreCheck). Both programs are valid for five years, with PreCheck costing $78 to apply and Global Entry costing $100. NEXUS, which allows for expedited entry between the US and Canada, is also valid for five years and costs $50 to apply. If I charge the application fee for one of these services to my United℠ Explorer Card, I get reimbursed on my statement once every four years, effectively making the membership free. Several other premium <a href="https://www.businessinsider.com/personal-finance/best-global-entry-tsa-precheck-credit-card">credit cards also offer Global Entry and TSA PreCheck</a> statement credits. <h2>The first checked bag is free for me and a companion on my reservation</h2>Although many people aim to travel using only a carry-on, it's not always possible to do so. <a href="https://www.cbsnews.com/news/united-airlines-raises-baggage-fees-2024/" target="_blank" rel="noopener">Checked bag fees have only increased</a>, with one bag costing $40 to check on United flights.However, if you're a United℠ Explorer Card cardholder, you and your companion (on the same reservation) get your first bags checked for free when purchasing flights using the card. <h2>I get two United Club one-time-use lounge passes a year</h2><div type="image" title="Emily sitting in a brown-leather chair, holding a glass of white wine with a plate of food on a table next to her. The walls are glass and see-through." height="2268" width="3023" msid="111815698" hostid="261" sizebytes="777214"></div><a href="https://www.businessinsider.com/personal-finance/credit-cards-with-airport-lounge-access">Airport lounges</a> are popping up everywhere, generally as a benefit of a high-annual-fee credit card or for those flying in first or business classes. But if you want the benefit of a lounge without high spending, the United℠ Explorer Card includes two one-time lounge passes a year for United Club use, which typically cost $59 apiece.I've used my one-time passes when I have a long layover or a delayed flight to access a United Club for complimentary food, drinks, and a quiet place to wait for my flight. This benefit alone exceeds the entire cost of the card's annual fee.<h2>The card comes with lots of added travel protections</h2>For a card with a low annual fee, the United℠ Explorer Card packs a punch with <a href="https://www.businessinsider.com/personal-finance/travel-insurance/travel-insurance-vs-credit-card">travel insurance</a> protections. This card includes lost luggage reimbursement (up to $3,000 per passenger), trip delay reimbursement (after 12 hours of delay, up to $500 per ticket for unreimbursed expenses), baggage delay insurance (after 6 hours of delay, up to $100 for three days), and trip cancellation or interruption insurance (up to $1,500 per person).When booking my travel with the United℠ Explorer Card, these perks allow me to travel with much more peace of mind. In fact, I've personally used both the baggage delay and trip delay insurance without any issues. <h2>I receive 25% back on in-flight purchases</h2><div type="image" title="A cookie in a package, a small bottle of white wine, a blue cup, and a napkin sit on a tray on a plane." height="2274" width="3024" msid="111815696" hostid="261" sizebytes="410306"></div>Another benefit I really love is that United℠ Explorer Card cardholders receive 25% back on in-flight purchases on United flights. This includes food, alcoholic beverages, and even WiFi purchases. Since I travel often, this perk makes a huge difference for me. <h2>The card also comes with a complimentary one-year membership to DashPass </h2>The <a href="https://www.businessinsider.com/personal-finance/united-explorer-card-review">United℠ Explorer Card</a> offers one year of complimentary DashPass membership, which can be used on DoorDash and Caviar. The benefit, normally $10 a month, offers various benefits like $0 delivery fees on orders that meet the minimum spend. If you regularly have <a href="https://www.businessinsider.com/foods-to-never-get-delivered-from-restaurants-according-to-chef-2022-6">food delivered</a> at home or while traveling, these fees add up, making the membership a great money-saving benefit. <h2>I also get primary rental car insurance</h2>I often rent cars during my travels, and having as much coverage as possible when driving them is important to me. The United℠ Explorer Card includes primary rental car insurance coverage. This means that I'm eligible for reimbursement up to the vehicle's actual cash value for theft and collision damage for most rental cars within the US and abroad. With primary coverage, I also don't have to first file a claim with my own auto insurance company.

I love using my Chase United Explorer card with a low annual fee. I get tons of travel perks, plus credits for DoorDash and more.

The Best Credit Cards With Primary Rental Car Insurance of 2024

The offers and details on this page may have updated or changed since the time of publication. See our article on <a href="https://www.businessinsider.com/lower-credit-card-late-fees-limits-savings-us-economy-impact-2024-3" target="_blank">Business Insider</a> for current information.Our experts choose the best products and services to help make smart decisions with your money (<a href="https://www.businessinsider.com/personal-finance/personal-finance-editorial-standards" class="not-content-link" target="_blank">here's how</a>). In some cases, we receive a commission from <a href="https://www.businessinsider.com/personal-finance/our-partners" class="not-content-link" target="_blank">our partners</a>; however, our opinions are our own. Terms apply to offers listed on this page.<ul class="summary-list"><li>The Biden administration has limited credit card late fees to $8, a 75% reduction.</li><li>This change could add $2.7 billion to household expenditures annually, boosting the US economy.</li></ul>The Biden administration set a new limit on <a target="_blank" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">credit card late fees</a>, and it could be worth billions to Americans, especially those in <a target="_blank" href="https://www.businessinsider.com/inflation-rate-hurting-poorest-workers-food-shelter-basic-needs-2023-10">lower income brackets</a>.On March 5, the Consumer Financial Protection Bureau finalized a new rule to <a target="_blank" href="https://markets.businessinsider.com/news/interestrates/cfpb-caps-credit-card-late-fees-at-8-1033134302">limit all credit card late fees</a> to $8 from $32 for first violations and $41 for subsequent violations. This comes as credit interest charges and fees are soaring, <a target="_blank" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">costing Americans more than $1,100 each year</a>, and leading to record levels of credit card debt.A new economic impact study provided to Business Insider by IMPLAN, an economic software and analysis company, showed that lowering the limit on credit card late fees would add more than $2.7 billion to household expenditures annually. The study also projected a $3.6 billion increase in US GDP and support for nearly 34,000 jobs annually.This new limit was part of the Biden administration's crackdown on "<a target="_blank" href="https://www.businessinsider.com/americans-could-save-billions-slash-credit-card-late-fees-cfpb-2023-2">junk fees</a>," which are fees that can confuse consumers because they are not obvious upfront.The CFPB estimated that credit card late fees cost Americans about $12 billion each year and that the new rule <a target="_blank" href="https://www.businessinsider.com/americans-could-save-billions-slash-credit-card-late-fees-cfpb-2023-2">could save them up to $9 billion per year. </a>About 45 million people are charged late fees annually, and that group could save up to $220 a year, according to the CFPB.<a target="_blank" rel=" nofollow" href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2023Q4">According to the Federal Reserve Bank</a>, more than 6% of credit card balances are in serious delinquency — behind by 90 days or more on payments — more than double the rate seen two years ago.There are concerns from opponents of the limit that credit card companies will attempt to compensate for <a target="_blank" rel=" nofollow" href="https://www.wsj.com/finance/regulation/credit-cards-could-swipe-department-stores-profits-bfccb82f">lost profits</a> by raising costs for all users. <a target="_blank" href="https://dailycaller.com/2024/02/28/ginn-biden-admin-junk-fees-american-bankers-association-late-fees/">Economist Vance Ginn</a> argued in a column for The Daily Caller in February that this could ultimately hurt small businesses and low-income households if credit companies limit who can get credit.<div type="image" title="Debts in serious delinquency." height="1336" width="1892" msid="108300963" hostid="261" sizebytes="112286"></div>A <a target="_blank" href="https://files.consumerfinance.gov/f/documents/cfpb_credit-card-late-fees_report_2022-03.pdf">study by the CFPB</a> published in 2022 showed that credit card late fees are disproportionally collected from people in low-income neighborhoods.<h2>Some industries will benefit more than others</h2>The benefits go beyond the typical consumer. The food, medical, and real estate industries will also see a positive impact, per the study.The food industry, including restaurants and retail stores, is expected to receive about $447 million in economic impact. More money back in the pockets of Americans would be expected to first go to immediate needs, such as food. The ripple effect extends beyond food.According to Jenny Thorvaldson, IMPLAN's chief economist and data officer, employment services, such as temporary staffing and recruitment services, are also expected to be economically boosted. If there's an increased demand in the food industry, then those businesses will need to expand their teams."Given the tight labor market and additional household spending on those services, those businesses will need to staff up or increase current staff hours," Thorvaldson added.<div type="image" title="A server delivers food and a beer in a bar." height="1643" width="2500" msid="108300964" hostid="261" sizebytes="148070"></div>Reduced credit card late fees would also be worth about $414 million to the real estate industry. If homeowners had more money to spend, they would start by making repairs, down payments, and mortgage payments on top of typical expenditures.Medical services, such as hospitals, nursing care facilities, and physician offices, would also gain about $550 million.According to Thorvaldson, the boost in medical expenditures is tied to people being less inclined to put off procedures and treatments they might consider optional."This is backed up by data that showed that people spent less on healthcare during the pandemic when they delayed care or went without," she added.According to the <a target="_blank" href="https://www.cdc.gov/mmwr/volumes/69/wr/mm6936a4.htm">Centers for Disease Control and Prevention</a>, about 40% of American adults reported avoiding medical care early in the pandemic.<h2>A drop in the bucket of credit card costs</h2><a target="_blank" rel="" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">Credit card debt</a> is now at record levels and interest rates on those cards have soared. Late fees are just a small portion of the total amount that Americans are charged for using credit cards each year. If Americans saved $9 billion, based on the CFPB estimate, that would still leave about <a target="_blank" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">$155 billion in interest and other fees</a>.<a target="_blank" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">Interest and other credit card fees</a> cost consumers more than $1,100 a year and are still growing. As a result, more people are finding themselves in holes they are struggling to escape.According to data provided to Business Insider by <a target="_blank" rel=" nofollow" href="https://www.moneymanagement.org/">Money Management International</a>, a nonprofit credit counseling agency, Americans who sought debt counseling soared to record levels in January after the holidays.<div type="image" title="Number of people seeking debt counseling and average volume of debt." height="767" width="1079" msid="108300965" hostid="261" sizebytes="39970"></div>The <a target="_blank" href="https://www.businessinsider.com/credit-card-debt-interest-rates-consolidation-economy-recession-soft-landing-2024-2">credit card crisis</a> Americans are now facing will weigh on the <a target="_blank" href="https://www.businessinsider.com/recession-outlook-economy-consumer-spending-gone-2023-9">US economy</a> in the foreseeable future, but capping late fees could be a bit of relief, even if it is a small one.Are you struggling with credit card debt or taking on extra jobs to pay your bills? Contact this reporter at <a target="_blank" href="mailto:cgaines@businessinsider.com">cgaines@businessinsider.com</a>.

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