Also on today’s menu:
Bureau Tackles ‘Junk Fees’
Buy Now, Pay Much More Later
Today is a “Day of Action” for Americans, when they can sign up for American Rescue Plan tax cuts. Families must file a 2022 tax return to receive the second half of the Child Tax Credit, and some also may qualify for the Earned Income Tax Credit.
While families received advance monthly payments between July and December 2021, they need to file a tax return to receive the second half of the money, as well as up to $1,400 per person through the Economic Impact Payment program. Some taxpayers with qualifying children — those who welcomed a new baby in 2021 or who have not filed taxes in recent years and did not use the non-filer portal — can get their full Child Tax Credit by filing 2022 tax returns.
The Day of Action coincides with the recent re-launch of ChildTaxCredit.gov. The revamped website has several new features to help taxpayers file their taxes and access the remainder of the expanded Child Tax Credit, the full amount of the Child Tax Credit, and/or the Earned Income Tax Credit as tax filing season begins.
Bureau Tackles ‘Junk Fees’
The Consumer Financial Protection Bureau will examine “junk fees” and potentially take steps to rein them in. Created in the wake of the 2008 financial crisis to protect consumers from financial abuse, the bureau estimates that consumers pay at least $29 billion annually in excessive charges, such as “resort fees” that are not announced when people book their destinations.
The agency singled out those resort fees, as well as a host of other charges, such as bank overdraft and non-sufficient funds fees, as being unfair to consumers. The problem, consumer advocates say, is that such fees often aren’t clear to consumers, lack competition that can lower or even eliminate them, and can drive up the cost of services far beyond what people expected to pay.
“Service charges inflate ticket prices, resort fees hike our costs to stay in hotels, and our phone bills are often laden with mystery charges,” CFPB Director Rohit Chopra said in a conference call with reporters.
The bureau is asking consumers to send the agency comments before March 31 about junk fees they have encountered. (Consumers can email their comments on the website www.regulations.gov; the email subject line must include “Docket No. CFPB 2022-00.”)
Buy Now, Pay Much More Later
Many travel companies are now offering buy-now, pay-later deals for flights, cruises, and vacation packages. Consumers basically take out a loan to go on their trip and then make small payments over months or even years, allowing them to go on their trips now and make payments after they return.
People should pay attention to the interest rate and fine print before agreeing to the deal, according to the Wall Street Journal. While some companies offer interest-free travel deals, interest on some deals can run above 30% and add hundreds more dollars to the trip’s total cost.
In December, the Consumer Financial Protection Bureau launched an inquiry into such plans — which can be used to pay for everyday items — to learn more about their role in consumer debt and how they use consumer data.
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