Kansas Citians, Biden Administration Question Credit Card Fees and Perks

Local citizens of Kansas City and members of the Biden administration have voiced their concerns about whether the benefits offered by credit card companies actually outweigh the often hefty fees that come with these cards.

Closer Examination

The Biden administration has shown significant interest in examining the details of credit card fees and advantages closely, arguing that many card holders could inadvertently be paying more in fees than what the card’s benefits are worth to them.

Many Kansas Citians, despite their lack of a physical presence at the official hearing at Capitol Hill, have echoed these sentiments. They commonly use their credit cards for substantial purchases in the expectation of earning substantial rewards points in return.

Consumer Protection Measures

This level of governmental scrutiny on credit cards acts as a continuation of the Biden administration’s push for better consumer protections. Some significant measures include the Consumer Financial Protection Bureau reducing late fees for credit cards, and the U.S. Department of Transport mandating airlines to give customers cash refunds in case their flight is significantly delayed or cancelled.

These reforms are a direct response to the significant percentage of mostly American citizens that use travel credit cards to cut costs on flights and hotel accommodations. According to a survey by personal finance company NerdWallet, the percentage stands at 41%.

Fee Calculation and Disclosures

A major cause for concern is the set of fees and rates that seem to persistently and inevitably climb, even for those who pay off their credit card bills consistently every month.

LaTasha Jacobs, the executive director at Pathway Financial Education, was of the opinion that opening bonuses and promised savings are marketing strategies employed by credit card companies. Focusing on these ‘shiny pennies’, as she termed them, could easily lead customers to gloss over the fine print.

Jacobs also stressed the importance of accurately calculating the benefits a credit card will provide before signing up, this includes considering how much one would typically have to spend for the annual fees to be covered by the cashback rewards.

Warning about High Cost Credit Cards

While there definitely are credit cards available with zero annual fees, there are also cards on the opposite end of the spectrum which charge more than $600 in annual fees. Couple that with interest rates over 24% and it becomes clear why the administration has voiced concerns.

Many Kansas City locals agree, including those who own credit cards with annual fees under $100, like resident GiGi Jones. Despite the comparatively lower fees on her card, she confesses to battling with justified its benefits.

She states, “So I guess I’m paying for the plastic, right?”