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The Biden administration this week moved to limit credit card late fees and called on Congress to crack down on “junk charges” in multiple other industries, including travel.
President Joe Biden is proposing new laws aimed at eliminating or limiting junk fees. A junk fee is when airlines, resorts and hotels add extra charges to their customers’ bills.
His administration calls it the Junk Fee Prevention Act, which covers four different types of junk fees.
- Excessive ticket prices for online concerts, sporting events, and other entertainment
- Airfare for a family sitting with an infant
- Mid-term cancellation fee for TV/telephone/Internet services
- Surprise Resort Fee and Destination Fee
Biden is urging Congress to pass a bill that alleviates a major pain point for travelers. Planning a trip is often complicated and expensive, but there are no surprises.
No charge for families to sit together on flights
Many airlines charge fees to select seats in advance, even when traveling with children. ) or a cheaper Basic Economy fare with no seat selection. Ultimately, the consumer is left with her two options. Either pay a high price or risk sitting a few rows away from your child.
The U.S. Department of Transportation (DOT) now requires U.S. airlines to allow children under the age of 13 to be seated next to an accompanying adult at no additional charge.
Biden’s proposed bill would ban airlines from charging families to sit together, and the administration says this will help the DOT crack down on violations more easily. .
Related reference: Can I sit with my child traveling in Basic Economy? Answers to the question
Hotel must include all charges in room rate
It’s more and more common these days to find something that looks like a great deal at a resort or hotel, but then go to checkout and find that the “resort fee” or “destination fee” has increased the price beyond your expectations. Many things. pay.
More and more hotels and resorts are starting to charge their customers these fees, which can be upwards of $50 per night. The Biden administration says more than a third of her hotel guests have paid such fees, which has generated billions of dollars in additional revenue for hotels over the years. I’m here.
The White House said these unexpected charges harm travelers because they can’t see the actual price when choosing a hotel, thus limiting their ability to weigh up. increase.
Biden is asking Congress to ban these astonishing charges by requiring hotels to include them in their room rates. That way, your customers won’t be surprised and you can budget and plan accordingly.
It’s unclear if the law will also affect home-sharing platforms like Airbnb and VRBO, forcing them to display prices up front. Airbnb recently announced that it will display full booking prices, including fees.
New rules limit credit card late fees
The Biden administration moved this week to limit the amount credit card companies can charge in late fees if cardholders fail to pay.
The Consumer Financial Protection Bureau (CFPB) has proposed new rules that limit credit card late fees to $8 and prohibit late fees exceeding 25% of a consumer’s required payment.
Currently, credit card companies can charge cardholders up to $41 for each outstanding payment, and these charges can add billions of dollars to credit card company revenues. Please note that these late fees may be in addition to other consequences of late payments, such as loss of grace period for interest payment and a lower credit score, depending on how long the payment has remained unpaid.
CFPB director Rohit Chopra said credit card companies “exploited regulatory loopholes to avoid scrutiny by charging excessive junk fees.”
Chopra added that these excessive late fees far exceed the cost to the credit card companies to collect the late fees and may not need to be deterred.
The CFFB submitted the proposed changes for review on Wednesday, but even if approved, the changes may not appear until 2024.
Conclusion
The Biden administration has set its sights not only on fees charged to travelers by airlines and hotels, but also on nuisance fees charged by credit card companies.
These new moves could bring welcome relief to travelers at a time when there seem to be hidden costs everywhere you look.
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