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<ul class="summary-list"><li>21-year-old Skylar Griffin has four credit cards, including and AmEx Gold and Platinum.</li><li>She got her first credit card as a freshman to build up her credit score and kept a strict budget.</li></ul>This as-told-to essay is based on a transcribed conversation with Skylar Griffin, a 21-year-old college student in Georgia. Griffin financial claims have been verified with documentation. The following has been edited for length and clarity.When I was a child, my mom often shared financial advice. She told us never to cosign for someone's loan and don't buy anything unless we could buy it twice.On several occasions, she advised us kids never to get a credit card unless we were responsible enough to pay it off each month.She didn't want us to struggle financially like she did as a single parent.In high school, I started watching YouTube videos about finances. I saw financial struggles firsthand, and I didn't want to be in that position as an adult. The videos taught me I'd need to build up my credit score to buy a car or a house or if I might need a loan.<h2 id="102ef261-a63c-412a-8936-6e2d5bc894d4">I got my first credit card before going to college</h2>In July 2021, I was preparing to study business management at Columbus State University in the fall. Without my mom's knowledge, I ordered a Bank of America student card. It was a Visa card with no annual fees. My mom wasn't happy. I reassured her I'd done my research and could handle the responsibility.During college, I worked at a call center during the school year, paid internships in the summer, and received refund checks because my scholarship was more than school costs. I also earned a bit of money doing social media content.My first card had a limit of $500. I would buy little things here and there, making sure I had enough in my checking or savings account to pay it off each month. I'd marked all the due dates in my calendar, and I was never late for a credit card payment. There were temptations to buy new clothes or tech, but I always fought it.<h2 id="fc7cfef9-313f-436d-be60-a1a46519f707">Getting an AmEx for the travel points</h2>I kept using the Bank of America card throughout my freshman and sophomore years of college, but in April 2023, I decided to take out an Amex Gold card as well.I'd heard about travel credit cards through watching financial advice videos online. If I used this card for buying groceries or dining out, my two main expenses in college, I would get four times the points to use on travel. Although I wasn't traveling much, I planned to travel. At the time, the card had a $250 annual fee, which was worth it for the points I felt.I only used my card for things I needed or had saved for. I never bought things just to earn points.In March 2024, I took a big leap and opened an Amex Platinum credit card. It comes with a high price tag — a $695 annual fee — but I thought the benefits outweighed the price. Because it was another Amex card, all of my points were added to the points earned from the Amex Gold.I only use this card for booking flights and hotels because this is what I get the highest points for. With the card, I get five times the points when booking flights and hotels, a $200 yearly airline credit, and a $200 yearly hotel credit.When I stay at Marriott or Hilton, I get 'high status' and often get my room upgraded. But my favourite perk is the CLEAR Plus membership which gets me through TSA quicker at the airport.I knew I was planning some big trips in 2024 to Japan and New York, and then a cruise to the Bahamas, so planned to make all my travel purchases on the Platinum. Since getting an Amex, I've been able to fly to Japan, New York, and Miami for free in 2024.With this card, I accessed airport lounges on the long trip to Japan and was part of the President's Circle with Hertz Car Rentals, so I was guaranteed a car upgrade when I rented a car to get around the country.<h2 id="ec2f29ef-d145-470e-972f-0e160d4e0cd5">I took out a fourth credit card so I could earn points for other purchases</h2>In June 2024, I decided to take out another Amex card — the Amex Blue Business Plus. This card means I can earn points paying for things like gas, that don't earn me points on my other cards.There's no annual fee, and I could only take it out because I'm considered a sole proprietor. I own a Mercari shop where I resell vintage clothes I find at flea markets.I only use my Bank of America card when Amex isn't accepted. I never use a debit card unless I'm pulling cash out of the bank.Even though I am confident and comfortable using credit cards, I still don't spend anything that isn't in my checking or savings account. I never base a purchase on the money that I'm expecting in my account, because you never know how finances could change.I put all my due dates in my calendar and aim to pay each of them off earlier than required. Sometimes, I feel the urge to overspend. But then I remember the interest rates on my cards, and I snap back to reality. Paying high interest because I can't afford to pay my bill in full is not worth the momentary satisfaction of shopping.In addition to all the benefits I've received when traveling, my credit cards helped me raise my credit score to 755.<h2 id="1abacec9-c073-4582-ac5e-15c3908118fc">I never stop learning about finance</h2>I think college students should consider getting a student credit card with no fee. They have low limits and can help start building a credit score. However, if you're impulsive or have poor spending habits, I wouldn't recommend it.My mom now says she's proud of how I manage my finances. I've always found personal finance interesting and the concepts easy to understand, but it takes dedication to stay on track financially. I never stop learning to make sure I'm doing what's best for my financial future.

I'm a college student who pays nearly $1,000 in annual fees for 4 credit cards. It's worth it for good credit and travel perks.

<ul class="summary-list"><li>If you've gotten really into credit card rewards in recent years, you're not alone.</li><li>Some Americans go to great lengths to maximize points, sign-up bonuses, and cashback.</li></ul>Aaryan Desai picked up a hobby during quarantine: <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/best-credit-cards">researching</a> <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/transferable-credit-card-points-best-rewards-to-earn">credit card</a> <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/ways-to-use-credit-card-points-beyond-travel">rewards</a>.The 20-year-old swipes as much as he can. Right now he's <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/how-to-book-free-travel-cheap-deals-credit-card-rewards">banking points</a> for a concert in October and a big trip after he graduates from Georgia Tech.Desai is part of a new generation of credit card users: young, perks-focused, and ready to maximize. Today's credit cards, he said, are like the coupon books of yore. The perks might not always be the right fit, but, if you figure out a good configuration, you can find some big savings.For Desai and other <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-rewards-points-friends-fights-brunch-money-payment-venmo-2024-7">rewards hounds</a>, the realization that they can perform a sort of points arbitrage was a real hook."Just using the money that I would be using otherwise or just getting together with friends and that, 'hey, I can just put it on my card and you can Venmo me later,' opening the door to getting 80,000 points from Chase or 175,000 from American Express — it was a new opportunity," he said, adding: "That's what got me into it."If it seems like the whole country suddenly has credit card point mania, you would be correct: An <a target="_blank" href="https://www.ipsos.com/en-us/majority-americans-value-their-credit-card-rewards">Ipsos poll</a> of 1,081 adults conducted from April 31 to May 1 found that 71% of respondents have a rewards or cashback credit card, and 68% said that they prefer using their credit card because of the rewards and points that they can earn.The poll found that a fifth of Americans ages 18 to 34 use their rewards to pay for things they wouldn't be able to afford otherwise. Younger Americans are flocking to previously fancy cards like <a target="_blank" href="https://www.businessinsider.com/american-express-platinum-card-gold-gen-z-millennial-rewards-2024-6">American Express</a>, willing to shell out hefty annual fees in exchange for perks like <a target="_blank" href="https://www.coachella.com/amex">exclusive access to Coachella tickets</a>.The rewards are a big reason <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-rewards-points-friends-fights-brunch-money-payment-venmo-2024-7">credit cards</a> have become a cultural juggernaut among young Americans. As costs rise and <a target="_blank" class="" href="https://www.businessinsider.com/millennial-subsidy-uber-airbnb-prices-surge-pricing-dynamic-2024-8">the millennial subsidy fades</a>, credit card rewards help a new generation live lifestyles they may not otherwise be able to afford: first-class flights, hotel rooms, and VIP concert experiences. It doesn't hurt that social media is full of videos and blogs that offer the tantalizing promise of free trips, luxury lounges, and fancy restaurants — if you can cobble together the right puzzle of points and cards without digging yourself into too much debt.<h2 id="124d8b83-ad11-40eb-84a1-249d4ffa65bd">Living the high life on credit card perks</h2>At first, 29-year-old Willem Van Eck thought the rewards game was a snake oil salesman's gambit. Cut to: He's stretched out in a first-class seat, a glass of bubbly in hand."Wow," he thought, "this actually is a scheme that you can leverage with the right flexibility and with the right research," Van Eck, a software engineer in the Bay Area, said.Credit card rewards work as an incentive to get customers to swipe more. They can come in the form of cashback — which means you get a partial refund for a given purchase in the form of a credit on your bill or a transfer to another account. Or they come as points, which are more nebulous but can typically be used as currency for future purchases. And then there are other perks like hotel credits, airline miles, gift cards, and upgrades like Van Eck's.For instance, the Platinum Card from American Express — often considered one of the <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/chase-sapphire-reserve-vs-amex-platinum-card#fees">top cards for rewards</a> — will cost you $695 in annual fees. In return, you'll get five points for every dollar spent on flights and a point for every other dollar spent. On average, <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/what-are-points-miles-worth-value#amex-membership-rewards">per BI's calculations</a>, an Amex point is worth 1.8 cents. Say you spend $5,000, $2,500 of which went toward flights; you'd net 15,000 points, which could equal around $270 — a significant chunk of the annual fee.In addition, many cards will also offer substantial sign-up rewards. The Platinum Card offers 80,000 points for spending $8,000 in the first six months of holding the card. Those 80,000 points alone could be worth twice as much as the annual fee.Taking advantage of this system requires diligence and restraint to avoid paying more in interest and fees than you gain in rewards. According to <a target="_blank" href="https://www.federalreserve.gov/econres/feds/files/2023007pap.pdf">a paper</a> looking at who this system hurts and benefits, borrowers who carry balances and businesses — which pay a fee on each credit card transaction — subsidize the fun for the rest of us.Pre-pandemic, Van Eck was chasing cards with high sign-up bonuses, like the Chase Sapphire Preferred card, because they allowed him to transfer points to airlines so he could book business or first-class seats. During the pandemic, he took note of the <a target="_blank" href="https://www.wsj.com/articles/airline-cards-lose-luster-as-coronavirus-persists-11606991400?mod=article_inline">beefed-up bonuses and short-term benefits</a> that companies were offering in an attempt to lure customers; his Delta card offered a $15-a-month dining credit, for instance. That's when Van Eck noticed that more of his Gen Z and millennial friends starting to become adept at navigating their benefits.Van Eck is very cautious of lifestyle creep and ensuring that cards are worth his while, especially amid high interest rates, inflation, and recessionary fears."I've seen most of my peers, including me, reevaluate the value proposition of the cards," he said. Every year, he goes through his list of cards to see which ones paid for themselves without him changing his behavior. If one doesn't, he'll cancel it.But not everyone is as prudent as Van Eck. In the high-paying tech industry where he works, Van Eck still sees people changing their habits to maximize rewards, which he doesn't think is smart. This could be why delinquencies have been on the rise in recent years, with the youngest borrowers leading the pack. After all, credit cards are fun to use. No, really. Contrary to the belief that we overconsume with credit cards because they ease the pain of spending, <a target="_blank" href="https://mitsloan.mit.edu/experts/how-credit-cards-activate-reward-center-our-brains-and-drive-spending">research finds</a> that their bigger appeal is that they make our brains feel like we're getting a reward. All that stands between you and access to that first-class airport lounge are a few taps or swipes.<h2 id="0f454fca-2571-4637-a3e5-c54130cda971">Nothing good lasts</h2>Credit card companies aren't just giving away rewards for free.As Lulu Wang, an assistant professor of finance at Northwestern's Kellogg School of Management <a target="_blank" href="https://insight.kellogg.northwestern.edu/article/who-pays-generous-credit-card-rewards#">finds</a>, many businesses will pass on their costs to customers. For example, say you use a 1% cash back rewards credit card at your favorite local coffee shop on $100 worth of coffee for you and your friends. The shop pays a 2% fee on the transaction — $2 — to your card issuer. Then, your card issuer would use some of that 2% fee to give you your 1% back. To cover their fee, the shop might raise their prices."In some sense, when you benefit from those rewards, you're taking that money from some mix of the merchant and other cash and debit card consumers out there in the economy who are then not benefiting from those rewards," Wang said.Perks aren't always a great deal for everyone. Will Springer, a 41-year-old in Indiana, uses his Chase Sapphire Preferred and Amex Platinum cards primarily for perks like travel insurance and car rentals. Since he lives in a more rural area, an Equinox gym membership benefit is moot, and he can't really use the Uber benefit offered — he sometimes converts it into food delivery credit for Uber Eats.Other loyal credit card point users say you can't bank on your favorite perks sticking around. Brandon Zemel, a 32-year-old music producer in Las Vegas, puts pretty much everything on a credit card. He has two cards, the Chase Sapphire Reserved with a higher annual fee that's more travel-catered, and the Chase Freedom Unlimited, which has a fairly flat return on points. He said his travel card shaves hundreds of dollars off of his expenses, and he loves to use his points to get himself onto seat upgrade lists.But Zemel recently lost a hugely useful travel benefit: a "<a target="_blank" href="https://www.forbes.com/advisor/credit-cards/chase-sapphire-reserve-card-ending-priority-pass-restaurant-benefit/">priority pass</a>" that could be converted into a $28 dining credit for both him and a guest."It seems to be a thing these days that every year, two years, three years, these companies devalue their product or their perks provided by their product," Zemel said. "And I guess to some extent it's to be expected, but it does kind of remind you that the things that you currently enjoy are not necessarily going to be here long term."As Zemel has seen during his time as a cardholder, the rewards craze has basically "grown exponentially," propelled by popular blogs and TikTokers. That can also dim the appeal of previously exclusive perks, like overcrowded airport lounges."People got really used to anyone with a pulse basically having some kind of access to the lounge at the airports," he said. Now, Delta has <a target="_blank" href="https://www.cnn.com/travel/delta-ceo-bastian-skymiles-changes/index.html">recognized</a> that it had too many elite cardholders — leading it, in some cases, to restrict access to <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/delta-sky-club-credit-card-access">lounges</a> to higher spenders.It's what Wang says is an example of "<a target="_blank" href="https://www.huffpost.com/entry/what-money-cant-buy_b_1442128">skyboxification</a>" — an increasing stratification of life among haves and have-nots, like a baseball stadium that's divided between crowds in the stands and richer fans in box seats."I can totally understand this looming dread that society is getting splintered into those who have access to this kind of stuff and those who don't," Wang said.I can relate to this sentiment. At a music festival this summer, I learned that my Chase Sapphire credit card would let me skip the line and access an air-conditioned tent with free water.However, when I arrived I learned a hard truth: I actually needed the card one tier above mine to get in. For one brief moment, as I gazed at the sparse crowd inside, I thought about applying on the spot. But I ultimately decided it wasn't in my best interest to incur a higher annual fee and open another line of credit.And yet, as I stood among the packed and sweaty masses, waiting nearly an hour to get food and water, I felt haunted by the skybox appeal. Would a new credit card do anything positive for my finances? Most likely not. Would it make me feel like a VIP at this event? Definitely. Maybe I'll try to get the Sapphire Reserve before next year's festival.Are you passionate about your credit card rewards? Have you gotten into debt trying to play the points game? Contact this reporter at <a target="_blank" href="mailto:jkaplan@businessinsider.com">jkaplan@businessinsider.com</a>.

Welcome to credit card points mania

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.

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

<ul class="summary-list"><li>I use credit-card points to book almost all my travel, but I try not to carry a balance on my cards.</li><li>I don't stockpile points unless I'm strategically saving for a specific trip.</li></ul>I am a <a target="_blank" class="" href="https://www.businessinsider.com/mistakes-to-avoid-visiting-50-states-according-to-frequent-traveler-2024-10">frequent traveler </a>— on average, I fly at least once a month — and I put most of my expenses on my Delta co-branded airline credit card.I save a ton of money while traveling by using my points to book flights, and my credit card also gets me into <a target="_blank" class="" href="https://www.businessinsider.com/things-to-never-do-airport-lounges-frequent-flyer">airport lounges</a> where I don't have to pay for food and beverages.Over the years, I've found a few ways to optimize my points by following a few rules. As someone who <a target="_blank" class="" href="https://www.businessinsider.com/europe-family-vacation-million-credit-card-points-luxury-flights-hotels-2024-10">books most of my travel with points</a> and miles, here are things I'd never do.<h2 id="30c646fa-2b51-415a-a4df-78b35ca57dda">Instead of hoarding points, I strategize how I'll use them</h2>I always have a target or goal that I'm saving my points toward, and I use them for travel we're planning in the near term rather than hoarding them for "someday."For example, I recently got enough points accrued for my family of four to fly roundtrip from San Antonio to <a target="_blank" class="" href="https://www.businessinsider.com/day-trip-to-bahamas-from-florida-balearia-ferry-review-2023-5">Fort Lauderdale</a> for our vacation.I typically use my saved miles to pay for my family's travel and charge my own airline ticket to my card. This keeps me accruing miles while feeling like I'm getting four tickets for the price of one.<h2 id="68f19801-e919-427a-9828-f30bbf0c669e">I only use my points for flights</h2><div type="image" title="Airport with glass wall" height="3484" width="5195" msid="114991387" hostid="261" sizebytes="482900"></div>In my experience, it's rarely a good value to use my <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/what-are-points-miles-worth-value">airline miles</a> and credit-card points on hotel stays or vacation packages.I can usually find deals on hotels through other loyalty programs or discount websites, so I save my points for flights, where they give me the most mileage — pun intended.<h2 id="b1a82e3d-122a-45aa-85d9-c693c89054f1">I try not to carry a balance on my credit card</h2>I accrue points through flights and other purchases with my Delta card, but I work to spend in a way that allows me to pay off my purchases monthly.I never want to carry a balance I can't afford and potentially <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-score/how-to-build-credit">negatively impact my credit</a> or get charged interest.<h2 id="67411841-bef4-4cbd-8eb0-6ce2b7dea7a1">Another thing I'd never do is have credit cards across a bunch of airlines</h2>I primarily travel on Delta but don't always get to choose my airline for work. Even so, I stick with my Delta card and just stay signed up for basic loyalty programs with other airlines.It's common to earn tons of miles when opening a new co-branded airline card, but I resist the offers. This is one time when I like to keep all my eggs in the same basket.I miss these perks when I'm not flying my preferred airline, but I remind myself that multiple airline cards mean multiple annual fees, and at the end of the day, that's not a good financial move for me.Plus, I like that my preferred credit card gives me free checked bags and the ability to choose a good seat without paying extra. I can also get on the plane in one of the early boarding groups, so the plane probably won't run out of overhead bin space before I get to my seat.Transparently, I also have a <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/chase-southwest-rapid-rewards-premier-credit-card-review">Southwest Airlines</a> co-branded card, but I don't use it often. It's my oldest credit card, and the interest rate is reasonable, so keeping it is good for my credit score for now.<h2 id="940cab87-07b9-4790-adfa-c7b6dfcea3cf">I won't delete emails from my credit card company until I read them</h2>I like to be an informed customer by staying updated on my card's changes and latest offerings.Sometimes, this means sifting through a lot of emails, but I set aside time to read through any changes to my card and special offers.Plus, some discounts or offers are time-sensitive, so failing to read the emails promptly might mean I miss out on news that would <a target="_blank" class="" href="https://www.businessinsider.com/traveling-world-learned-save-money-at-home-2024-10">save me money</a>.

I use credit-card points to book almost all of my travel — but there are 5 things I'd never do

<ul class="summary-list"><li>Hoping to say goodbye to high credit-card late fees?</li><li>You may need to keep dreaming.</li></ul>Credit-card companies aren't giving up their late fees that easily.In March, the Consumer Financial Protection Bureau announced that the federal government had made a new rule <a target="_blank" href="https://www.businessinsider.com/lower-credit-card-late-fees-limits-savings-us-economy-impact-2024-3">capping credit-card late fees</a>.The rule limits fees for a first violation to just $8, a move that the CFPB estimates could save US customers billions.But the blowback from the credit-card industry has been fierce, and they've taken the government to court over it.This week, a federal judge in Texas is expected to rule on a request to pause the new cap on late fees while a lawsuit is pending, <a target="_blank" href="https://www.cnbc.com/2024/05/09/cfpb-credit-card-late-fee-cap-faces-possible-freeze.html">CNBC reported</a>.If the judge sides with the companies — and the US Chamber of Commerce, who joined the lawsuit — the changes to fees wouldn't go into effect.The cap was set to begin on Tuesday.<a target="_blank" href="https://www.businessinsider.com/credit-card-late-fees-cap-swipe-mastercard-visa-jpmorgan-rewards-2024-4">Business Insider's Emily Stewart recently warned</a> that it was too early to start celebrating the death of high fees. Despite an election-year push by President Joe Biden to cut down on so-called "junk fees," credit-card companies won't go quietly, she wrote.Even as they fight the rule changes in court, companies could likely find other ways to make up the money by increasing other fees, Stewart reported.Matt Schulz, the chief credit analyst at LendingTree, told BI at the time: "I would imagine that we will see other fees increase over the next little while."One place could be annual fees, which have <a target="_blank" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">already been rising</a> and could be pushed even higher to sneak them past customers who aren't paying attention to their statements, BI previously reported.

The credit-card industry's Hail Mary push to keep charging you bigger late fees 

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/american-express-platinum-card-perks-annual-fee-worth-it-2024-5" target="_blank">Business Insider</a> for current information.<ul class="summary-list"><li>As someone who travels for work, I'm always looking for ways to make travel more cost-efficient.</li><li>Although my <a href="https://www.businessinsider.com/personal-finance/american-express-platinum-credit-card-review" target="_blank" rel="noopener">Platinum Card® from American Express</a> charges a $695 annual fee, I find it saves me money.</li></ul>As a full-time, on-the-go content creator, I practically live at airports and am always looking for ways to make my travel experience easier.From trying out the latest packing cubes to looking for flight deals, I'm all about efficiency and saving money.That's why it may be surprising to learn that one of my biggest travel game-changers involves spending money with a travel credit card. Like the <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">41% of Americans with a travel card</a>, I use mine to save money on hotels, flights, and more.Although the $695 annual fee for my American Express Platinum Card seems steep at first glance, it's actually saved me money in the long run. And, more importantly, it's made my travels much smoother.Here are just some of The Platinum Card® from American Express benefits I use most often.<h2>My American Express Platinum Card gives me access to the Centurion Lounge</h2><div type="image" title="A plate of breakfast food, a coffee, and a purse on a circular white table near a window at an airport. There are Southwest planes in the background." height="2274" width="3024" msid="109954712" hostid="261" sizebytes="405780"></div>Because I travel frequently, <a href="https://www.businessinsider.com/what-delta-sky-club-lounge-is-like-jfk-review-photos-2024-3" target="_blank" rel="noopener">lounge access</a> is important to me. Call me bougie, but I love having a quieter space to sit down and enjoy a meal and a drink before my flight.As a Platinum cardholder, I can access <a href="https://www.businessinsider.com/personal-finance/amex-centurion-lounges-how-to-access" target="_blank" rel="noopener">Centurion</a> and Priority Pass lounges worldwide. Of course, this benefit is only worthwhile if you, like me, enjoy eating and drinking at airports and your home airport has a Centurion Lounge.With <a href="https://www.businessinsider.com/airports-that-have-the-best-and-worst-food-2020-1" target="_blank" rel="noopener">airport restaurants and bars</a> charging sky-high prices for basic food and drink, enjoying complimentary gourmet food in the Centurion Lounge is a treat.<h2>I also get a $200 airline-fee credit</h2>As a Platinum cardholder, I can choose a qualifying airline and enroll to receive up to $200 of statement credit for incidental airline fees each year.This includes <a href="https://www.insider.com/travel-packing-tips-and-tricks-2019-3" target="_blank" rel="noopener">checked bag fees</a>, in-flight purchases, seat assignments, and airport-lounge day passes when I pay for them using my American Express Platinum Card. While these fees might seem small, they add up quickly when traveling frequently.<h2>The $240 digital entertainment credit can be used on things like streaming services and news sites</h2>As a frequent traveler, I rely on digital entertainment, and luckily, my card provides $20 in statement credits each month for some of the most popular digital entertainment services after enrollment.Peacock, Disney+, The Disney Bundle, ESPN+, Hulu, The New York Times, and The Wall Street Journal are all services that can be reimbursed if I pay for them using my Platinum card.<h2>I always take advantage of the $200 annual hotel credit</h2><div type="image" title="Emily's feet in sandals and two yellow suitcases. She is standing in a line at the airport." height="2274" width="3024" msid="109954713" hostid="261" sizebytes="643738"></div>With my American Express Platinum Card, I get a one-time $200 statement credit on a pre-paid booking with Fine Hotels + Resorts (FHR) or The Hotel Collection (THC) through American Express Travel.I also get perks like a complimentary daily breakfast for two, room upgrades (when available), and a $100 property credit on top of the statement credit. This can generally be used at hotel restaurants or even spas, but can vary based on each property.I use the FHR benefit each year on a special stay — this year, I stayed at the historic <a href="https://www.businessinsider.com/royal-hawaiian-resort-expensive-worth-it-review-photos-2023-11" target="_blank" rel="noopener">Royal Hawaiian on Waikiki</a>. I received a $200 credit after paying for my room, early check-in and late checkout, free breakfasts, a room upgrade, and a property credit that I used for a nice dinner and drinks at the pool.<h2>With my card, I can get reimbursed for Clear Plus, TSA Precheck, and/or Global Entry</h2>In my opinion, the worst part of the airport experience is going through security. That's why I take every step possible to make things easier for myself.With my card, I can enroll to get reimbursed for the $100 Global Entry fee, which expedites customs screenings for international arrivals in the U.S. Global Entry also includes <a href="https://www.insider.com/why-get-tsa-precheck-2018-11" target="_blank" rel="noopener">TSA PreCheck</a>, which makes the domestic airport-security process quicker.I also get a $189 statement credit for CLEAR Plus, a paid membership program that uses facial recognition or fingerprints for identity verification at some airports, after enrollment.<h2>I even get credit for Uber Eats and Saks purchases</h2><div type="image" title="A pepperoni pizza, a drink, and a copy of The New Yorker on a small round table covered in tiles." height="2125" width="2834" msid="109954716" hostid="261" sizebytes="489594"></div>Another perk of my credit card I can enroll in is a monthly Uber Cash benefit. Each month, $15 is deposited into my Uber account to use on rides — or my favorite, Uber Eats. I also get an extra $20 credit in December.When I'm traveling and want to stay in, or return from a trip and don't want to hit the grocery store, I'll use the Uber benefit to get delivery using Uber Eats. Just be sure to use the benefit each month, as it doesn't roll over.I also receive $50 in statement credit from Saks Fifth Avenue every six months after enrollment. I use this for buying gifts or small items, offsetting the cost of a larger purchase, or getting something special for an upcoming trip.<h2>My card covers insurance for rental cars and trip delays</h2>When I use my Platinum card, I don't spend extra money on insurance for rental cars or trip delays.If I rent a car using my card and enroll in the program, I get secondary rental-car insurance that can cover some damages beyond what my primary insurance would.I also have peace of mind when it comes to travel delays or interruptions.If I book a trip with my card and the flight is delayed for more than six hours for a qualifying reason, I can get reimbursed for purchases that resulted from the delay — up to $500 per trip. This could include meals, lodging, and personal items. I hope I'll never need to use it, but it feels good to know I have it.<h2>I find the card pays for itself in benefits</h2>Overall, the benefits I gain from being an American Express Platinum cardholder are worth the $695 annual fee.Because I travel so often for work, it's nice to know I have access to conveniences like lounges and expedited security programs.

I swear by my AmEx card with a hefty annual fee. I get tons of travel perks and over $1,000 in credits for Uber, hotels, stores, and more.

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>.

Biden's change to credit card fees could be worth nearly $3 billion to American consumers

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<ul class="summary-list"><li>Bilt Rewards, a Wells Fargo co-branded credit card, allows people to earn rewards by paying rent.</li><li>Bilt's core demographic are high-earning young professionals.</li></ul>Wells Fargo may have underestimated just how savvy young professionals could be with a credit card that rewards renters.In 2022, <a target="_blank" href="https://www.businessinsider.com/personal-finance/wells-fargo-review">Wells Fargo</a>, the San Francisco-based bank, partnered with Bilt Technologies, a fintech startup, to offer a rewards program that incentivizes customers to pay rent with a credit card.For many young renters, the allure was clear: <a target="_blank" href="https://www.businessinsider.com/personal-finance/bilt-mastercard-card-review">Bilt</a> offered a <a target="_blank" href="https://www.businessinsider.com/personal-finance/best-no-fee-credit-card">zero-annual-fee card</a> that allowed its users to earn a point for every dollar spent on rent without incurring transaction fees. The only requirement was that customers make five transactions each statement period to earn the points.Customers could also receive points for travel and dining. Those points could then be used for purchases with any of Bilt's partners, such as <a target="_blank" href="https://www.businessinsider.com/bilt-adds-alaska-airlines-transfer-partner-loses-american-airlines-2024-3">Alaska Airlines</a>, Virgin Atlantic, Hyatt, and Soul Cycle.According to <a target="_blank" href="https://www.wsj.com/finance/banking/wells-fargo-credit-card-rent-rewards-8e380852">The Wall Street Journal</a>, Bilt opened more than one million accounts within the first 18 months.But the return for the bank has yet to materialize.<h2 id="41a0e031-bf66-4b05-bc06-db1e4feed271">A 'generation of young, affluent new customers'</h2>Bilt's demographic is decidedly different from the <a target="_blank" href="https://www.businessinsider.com/personal-finance/average-american-net-worth">average American</a> — who has a median salary of just less than $60,000, with 49% of them holding onto a credit card balance month-to-month.But a report on Bilt prepared by investment banking firm Financial Technology Partners said the company was reaching out to a "generation of young, affluent new customers."In a February interview with The Wise Marketer, Dave Canty, Bilt's head of loyalty and partnerships, said the company's core demographics are between 24 and 34, with a median age of about 29."The average income," he said in the interview, "is about $147,000, so these are <a target="_blank" href="https://www.businessinsider.com/meet-typical-dink-double-income-no-kid-net-worth-retirement-2023-11">high-achieving young professionals</a>."Bilt CEO and founder Ankur Jain said on X that his company was attracting "highly valuable customers" for Wells Fargo at low costs. The average customer is 31 years old and has a 760 FICO score, he said.Kevin and Amanda Smidt, a Miami-based couple, told Business Insider they've been Bilt cardmembers for about a year after they heard about the program on a financial podcast."I've never heard of it, and I was like, 'Wow, that's so smart,' because — especially if you live in a major city like New York or Miami — you're spending a lot of money on rent," Amanda, a 32-year-old business owner and registered nurse anesthetist, said. "I was like, 'This makes so much sense because I have this huge payment every month, but now I'll get points.'"The two described themselves as financially responsible, telling BI they never carry a balance on their multiple personal credit cards, including Bilt."I heard about it on a financial podcast about investing. I'm a responsible person who invests, you know what I mean?" Amanda said.Kevin, who is 33 and working on his fellowship as an orthopedic surgeon, told BI that the card has been fruitful.The couple said they racked up 56,000 points in about six months and transferred them through one of Bilt's programs to turn their earnings into 126,000 points with <a target="_blank" href="https://www.businessinsider.com/virgin-atlantic-business-class-flight-experience-photos-worth-it-2023-9">Virgin Atlantic</a>. Kevin said they used the reward to pay for three flights, two in business class and one on Virgin's new plane.The husband told BI that he could see the card being beneficial for general use, given the rewards a customer could gain from travel and dining. But for the Smidts, most of the other purchases they made with Bilt were to meet the minimum five-transaction requirement."A lot of the times, that's like a latte," Amanda said. "I just do small purchases to be able to get the points from the rent."Kevin said he hopes Wells Fargo doesn't get rid of Bilt, but Amanda chimed in: "Well, actually, we just bought a house.""Oh yeah," Kevin added, "so we won't be able to use it anymore."<h2 id="52322de8-1296-4a1c-9556-5d6acb37ec6d">A costly program</h2>The Journal reported on Sunday that Wells Fargo was losing up to $10 million monthly to sustain the Bilt program, citing anonymous current and former employees.According to the report, part of the problem is that Wells Fargo may have miscalculated how Bilt customers would use the card.The Journal reported that only 15% to 25% of the dollars people spent on the card were carried over month-to-month, which is crucial for Wells Fargo to generate <a target="_blank" href="https://www.businessinsider.com/credit-card-interest-rates-late-fees-are-rising-recession-2023-11">interest-fee revenue</a>. The bank projected that the carry-over would be between half and three-quarters of the dollars spent.Wells Fargo also anticipated that 65% of the credit card purchase volume would be for expenses other than rent. Instead, <a target="_blank" href="https://www.businessinsider.com/12-million-americans-spend-over-half-paycheck-rent-harvard-study-2024-1">according to The Journal</a>, most purchases are for rent payments despite Bilt's requirement for five transactions per statement to score points.Wells Fargo and Bilt declined to comment on the reported numbers. A Bilt spokesperson told Business Insider that Wells Fargo does not make the numbers publicly available.In an email, a Wells Fargo spokesperson told Business Insider that co-branded credit cards are "one modest piece of the company's overall credit card business strategy, and the BILT credit card is one component of that.""As with all new card launches, it takes <a target="_blank" href="https://www.businessinsider.com/chase-sapphire-reserve-is-jpmorgans-gateway-drug-2018-2">multiple years for the initial launch to pay off</a> and while we are in the early stages of our partnership, we look forward to continuing to work together to deliver a great value for our customers and make sure it's a win for both BILT and Wells Fargo," the spokesperson said.According to The Journal, the losses have pushed Wells Fargo to rethink its partnership with Bilt, and the bank won't renew its contract, which is set to expire in 2029.The Wells Fargo spokesperson said that "there has been no conversation among decision-makers to exit the BILT agreement. To suggest otherwise is false."A Bilt spokesperson said the Journal's story is an "inaccurate representation of our strategic partnership with Wells Fargo."On X, Bilt CEO Jain did not address the reported losses but repeated Wells Fargo's statement denying the bank's plan to end the partnership once the contract expires.

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