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A Texas judge earlier this month threw out a federal rule that would have capped credit card late fees at $8. The Consumer Finance Protection Bureau finalized the rule last year as part of the Biden administration’s efforts to do away with what it called junk fees. It was paused by the courts before it could take effect. At the time, the CFPB estimated that American families would have saved more than $10 billion in late fees annually had the fees been capped at $8, significantly less than the $32 average. Banks and industry groups argued that the rule didn’t allow card issuers to charge fees high enough to deter late payments and discourage repeat violations. The Texas judge’s ruling earlier this month came a day after a collection of major industry groups and the CFPB under President Donald Trump announced that they had reached an agreement to throw out the rule. Here’s what to know about credit card late fees: What is the average credit card late fee? The average late fee for major issuers has steadily ticked up since the 2010s, going from $23 at the end of 2010 to $32 in 2022, according to the CFPB. WalletHub, which tracks financial data, found the average late fee in 2025 to be $30.50, with the maximum $41. A September 2023 Consumer Reports study estimated that 1 in 5 American adults, or about 52 million people, paid a credit card late fee in the previous year. People with lower incomes pay proportionately bigger fees, according to the CFPB, with the highest burden falling on communities of color and those living paycheck to paycheck. How can consumers avoid the fees? Enrolling in auto-pay for your credit cards can help you avoid making late payments, and there are some credit cards that don’t charge late fees at all (though it’s important to note that these cards may have other fee or penalty structures, or higher interest rates.) Citi Simplicity and the Apple card do not currently charge late fees, and Discover offers a card that will automatically waive the first late fee. It’s also possible to appeal credit card late fees charged by your credit card company by calling them directly. The companies will often reverse the fees, especially if it’s your first late payment. You may also want to consider making payments on your credit card balances during the month. That means you’ll have paid more of the balance by the time the amount comes due, and keeping your balance low relative to your credit limit can improve your credit score. If you’re having trouble making ends meet, you can ask your credit issuers about hardship programs. These are typically available to people affected by job loss, illness or medical conditions, natural disasters, or other emergencies. What was the CFPB credit card late fee cap rule about? Concerned that credit card companies were building a business model based on high penalties, Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), which banned the companies from charging excessive late fees and established clearer disclosures and consumer protections. In 2010, the Federal Reserve Board of Governors voted to issue a regulation implementing the CARD Act, which said that banks could only charge fees to recover costs associated with late payment. However, the rule included an immunity provision that let some banks charge $25 for the first late payment and $35 for subsequent late payments, adjusted for inflation each year. Those amounts subsequently grew to $30 and $41. After a review of market data, the CFPB finalized a rule that would have capped late fees at $8 and ended automatic inflation adjustments. Based on records analyzed by the CFPB, a late fee of $8 would be sufficient for card issuers, on average, to cover collection costs incurred as a result of late payments. How have banking groups responded to the court decision? Industry groups, including the Consumer Bankers Association, American Bankers Association, the U.S. Chamber of Commerce, and others, said they welcomed the court’s decision eliminating the cap. The groups said that the rule would have led to higher interest rates and reduced credit access for card holders. The groups also said the rule would have reduced important incentives for consumers to manage their finances. The CFPB has estimated that banks bring in roughly $14 billion in credit card late fees a year. How have consumer advocates responded? Horacio Méndez, president and CEO of Woodstock Institute, an organization for advancing economic equity, called the ruling a devastating blow. By tossing out the CFPBs common-sense rule to cap these predatory late fees some as high as $41 a federal judge is putting corporations over the lives of everyday consumers,” he said. The CFPBs rule was borne out of clear evidence: the credit card industry was using inflated late fees as a profit engine, forcing families with the least financial cushion to pay. Méndez said that while consumers have come to expect fees for services, those fees needn’t be punitive to be effective. ___ The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism. Cora Lewis, Associated Press
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E-Commerce
Energy drink company Celsius Holdings announced today that its subsidiary brand, Alani Nu, has notched more than $1 billion in sales over the past 52 weeksrepresenting a head-turning 72.4% year-over-year sales increase. The companys impressive success demonstrates that the functional beverage craze may not be merely a passing fad for consumers. Celsius Holdings, which also owns the popular energy drink Celsius, officially acquired Alani Nu last month for $1.8 billion. The brand was originally founded by entrepreneur Katy Schneider and husband Haydn Schneider in 2018, and has since found a growing audience of Gen Z and millennial consumers looking for a low-calorie, zero-sugar energy drink option. According to a press release, Alani Nus $1 billion milestone has been fueled by accelerated brand growth, strong and unique innovation, and a growing female energy drink consumer segment seeking better-for-you, functional beverages that fit their health and wellness lifestyles. As of this writing, Celsius Holdings stock is up slightly by 0.16% since market open. What Alani Nu’s success says about the future of “functional beverages” Over the past several months, functional beverages, or drinks that offer some kind of mood or health boost (in the case of Alani Nu and Celsius, that would be the added jolt of caffeine), have gained popularity in the mainstream beverage market. A study by Nielsen IQ last spring found that sales of functional beverages grew by 54% between March 2020 and March 2024 to $9.2 billion, accounting for 10% of the total nonalcoholic beverage market in the U.S. Subcategories of this market, including energy drinks and sports beverages, are similarly trending up. Experts across the beverage industry largely attribute this trend to a rising interest in health and wellness among Gen Z and millennial consumers, who are increasingly choosing to ditch alcoholic beverages in favor of more healthy drinks that can offer one or more benefits. In the past year, new brands like the DTC sports beverage company Magna and influencer Alex Coopers electrolyte drink brand Unwell have emerged to capitalize on this widening consumer base. Meanwhile, existing brands like Mio, Bodyarmor, and Liquid I.V. have all introduced refreshed looks to emphasize their functional features. Alani Nu, which has positioned itself as a health and wellness brand for women since its founding, was uniquely prepared to capitalize on this trend as it emerged. The energy drink comes with 200 mg of caffeine per 12-ounce can (the equivalent of about two cups of coffee) and is vegan, sugar-free, gluten-free, and low-calorie. The brands $1 billion milestone shows that, more than a year after the initial hype around functional beverages first began, the sector has taken root as a more permanent beverage categoryone that’s both attracting a new generation of consumers and causing beverage giants to rethink how they market their products.
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E-Commerce
Chinese robotaxi technology company Pony AI Inc. (Nasdaq: PONY) was up a whopping 55% on Mondayyes, you read that rightafter Chief Technology Officer Lou Tiancheng told the Wall Street Journal it can now build its autonomous driving system for 70% less and is on the road to profitability. Pony AI makes the technology that allows cars to become autonomous, or self-driving, not the cars itself, but it partners with companies to make the cars. It also operates a fleet of robotaxis in China. Last week, Pony AI also received positive feedback after it unveiled three new driverless vehicles at the Shanghai Auto Show, which were co-developed with Chinese state-owned automakers BAIC Motor and Guangzhou Automobile Group, as well as Toyota. And that’s not all. Also last week, Pony AI announced a partnership with Chinese tech firm Tencent, which would see Pony AI’s autonomous ride-hailing services integrated into Tencent Maps as well as the popular social platform, WeChat. Analysts estimate the company has slashed its bill-of-materials, or BOM (all the materials, components, sub-assemblies, and instructions needed to manufacture a product) costs for its robotaxis from $137,217 to just $41,165. Cheaper production could enable Pony AI to achieve single-unit breakeven, or the point at which it makes a profit each time a new robotaxi is added to its fleet, according to the WSJ. Some analysts think it could reach that coveted goal by the end of 2025, but that the company likely wouldn’t turn a profit until at least 2030, when it hits 50,000 robotaxis. The key is software optimization, Lou told the WSJ. For example, our software performance has tripled under the same computing power. It’s worth noting that Pony AI, which focuses on developing and deploying autonomous driving technology, including robotaxi services, has yet to turn a profit, and in fact posted a loss last quarter, which was its first reporting since going public last year. If all goes well, Pony plans to to start production of its robotaxis mid-year, with the goal to expand from 300 vehicles to 1,000 at the end of 2025, per the WSJ.
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E-Commerce
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