Part 9 of Passing the Buck, a 15-part series on why we make less but pay more.
This installment is about all the other fees: the ones below the line on the bills I have already written about, the surcharges and convenience charges and service fees and resort fees and processing fees that have become the dominant feature of American retail and service pricing over the last twenty-five years. The category is large enough that it has acquired a generic name in policy circles — “junk fees” — and it has produced the most concentrated burst of consumer-protection rulemaking of the Biden administration. Some of that rulemaking is now in effect. Some of it has been killed by the courts or withdrawn by the new administration. The story of which is which tells you most of what you need to know about the structural politics of consumer regulation in this country.
The category
The fees come in roughly four flavors.
Drip-pricing fees. The hotel that lists a $149 nightly rate in the search results and then adds a $35 “resort fee” and an $8 “tourism fee” at checkout. The concert ticket that lists at $65 and ends at $93 after service charges and order processing and facility fees. The airline ticket that advertises at $280 and ends at $387 after a checked bag and a seat assignment. The rental car that lists at $40 a day and ends at $93 after the airport concession fee, the facility fee, the licensing fee, and the insurance that is opt-out rather than opt-in. The fee is mandatory in the practical sense — you cannot take the trip without it — but it is presented as an add-on so that the advertised price stays low for comparison-shopping purposes.
Convenience-disguised-as-cost-shifting fees. The landlord’s online rent portal that charges a $35 service fee to pay rent on the day it is due. The utility company that charges $2.95 to take an electronic payment that costs them roughly nothing to process. The pharmacy that charges a “convenience fee” for filling a prescription, which is the entire business they exist to operate. These fees almost always have lower-cost alternatives that the company has made deliberately inconvenient — mail a check, drop off in person during weekday business hours, wait three business days for an ACH transfer. The friction is the product.
Penalty fees. The credit card late fee. The phone reactivation fee. The early termination fee on the cable contract. The overdraft fee, which I covered in Part 3. The bank monthly maintenance fee for falling below the minimum balance. These fees disproportionately hit households whose cash flow does not allow them to maintain comfortable buffers, which is a polite way of saying that they disproportionately hit households with lower incomes. The CFPB’s research on overdraft consistently shows that under nine percent of bank accounts pay roughly eighty percent of overdraft fees — the same heavy-user pattern holds for late fees.
Things-that-used-to-be-included fees. Checked baggage. Carry-on baggage on the lowest fare classes. In-flight entertainment. Hotel WiFi. Hotel parking. Bank checking accounts. Paper statements. Talking to a teller in person at some banks. The fee did not start at zero and grow; the item was previously bundled into the base price, and over the last fifteen to twenty years the industries got better at unbundling it.
None of this is hidden in any analytical sense. The fees are disclosed in the fine print, in the receipt, in the small type below the headline price. What they are, structurally, is a marketing exploit: companies discovered that headline prices drive comparison-shopping decisions, while final prices are paid by consumers who have already mentally committed to the purchase. The drip-pricing literature in behavioral economics is unambiguous on the point. Once a consumer has clicked through three pages of a checkout flow, they almost always complete the purchase even when the final price is meaningfully higher than the headline price they originally responded to.
The rules that passed, and the rules that didn’t
In the last three years, four federal agencies tried to do something about this. The results are an instructive split.
The Federal Trade Commission’s Junk Fees Rule, finalized December 17, 2024 on a 4-1 bipartisan vote and effective May 12, 2025, requires that businesses selling live-event tickets and short-term lodging (hotels, Airbnb, VRBO, Vrbo) display the total price inclusive of all mandatory fees in the headline price they advertise. The rule does not ban any fees — a hotel can still charge a resort fee — but the resort fee has to be in the $184-a-night number on the search results page, not added at checkout to a $149 advertised price. The rule went into effect a year ago. If you have booked a hotel or concert ticket recently and noticed that the advertised price now includes what used to be hidden add-ons, that is the rule working. It survived the change of administration because of the bipartisan vote, and because the affected industries had largely accommodated themselves to the new disclosure regime by the time it took effect.
The Department of Transportation’s airline fee disclosure rule, finalized in 2024, requires airlines to display checked bag, carry-on, and seat selection fees up front when a consumer searches for fares. It is the air-travel equivalent of the FTC rule and is in effect now. It does not cap or ban the fees — you still pay $35 to check a bag — but the $35 appears in the comparison-shopping flow, not after you have committed.
The Federal Communications Commission’s broadband “nutrition label” rule, finalized in 2024 and now in effect, requires internet service providers to disclose total monthly cost including equipment rental, regional sports surcharges, broadcast TV fees, and other line items in a standardized format at the point of sale. The cable industry fought it hard, the rule passed anyway, and the labels now appear on Comcast, Charter, AT&T, and Verizon Fios sales pages.
These are the wins. They are real, they survived a change in administration, and they have measurably changed the disclosure environment for the three biggest categories of drip-pricing complaints (lodging, live events, air travel) plus broadband. The Biden FTC and the Biden DOT and the Biden FCC did this work, and the rules have stuck. It is the rare recent example of consumer protection actually arriving at the consumer.
The CFPB’s credit card late fee rule is the cautionary counterexample. In March 2024, the Consumer Financial Protection Bureau, under director Rohit Chopra, finalized a rule capping the “safe harbor” late fee for large credit card issuers (those with more than a million accounts, which covers roughly ninety-five percent of outstanding balances) at $8, down from the existing safe harbor of $30 for a first violation and $41 for repeat violations. The CFPB estimated the rule would save American households roughly $10 billion a year, or about $220 per affected household. Two days after the rule was issued, the U.S. Chamber of Commerce, the American Bankers Association, and four other trade associations filed suit in the Northern District of Texas. In May 2024, federal judge Mark Pittman issued a preliminary injunction blocking the rule from taking effect. In December 2024, he found the plaintiffs likely to succeed on the merits.
Then came the change in administration. Rohit Chopra was removed from the CFPB. Russell Vought was installed as acting director. On April 15, 2025, the CFPB itself — the agency that had spent two years writing and defending the rule — filed a joint motion with the plaintiffs asking the court to vacate the rule entirely. Judge Pittman granted the motion the same day. Credit card late fees for the big issuers remain at $30 to $41, and the $220-per-household savings the rule was projected to produce was not. The agency stopped defending its own work.
The pattern is worth naming. Disclosure rules, which require companies to tell consumers what they are charging, generally survive. Substantive rules, which would actually cap or ban the amounts being charged, generally do not. The FTC’s drip-pricing rule made the resort fee visible at the search-results stage. It did not eliminate the resort fee. The DOT rule made the baggage fee visible. It did not eliminate the baggage fee. Even the CFPB cap on overdraft fees that I covered in Part 3 mostly survived only at the disclosure level; the underlying fees remain legal and continue to generate roughly $9 billion a year in industry revenue. The industries can accept the disclosure rules because the fees themselves still get paid; what they cannot accept is a cap on the dollar amount.
What it costs
The aggregate fee burden on American households is hard to estimate precisely because of definitional fuzziness — what counts as a junk fee versus a legitimate priced service, what counts as a household-paid fee versus a business-paid fee that gets passed through in the form of higher prices, and so on. The Biden White House’s own internal estimate, in pushing the various agencies to act, put the figure at $50 billion to $90 billion a year in identifiable household-paid junk fees — roughly $400 to $700 per household per year. That was the conservative estimate. Less rigorous tallies that include payment processing fees (which businesses pay but consumers fund), penalty fees of various kinds, and the bundled-out fees in cable and airline pricing run several times higher. The honest answer is that it is in the tens of billions of dollars annually at minimum, and most of the burden falls on households who can least afford it because they are the ones most exposed to penalty fees and most reliant on the cheapest unbundled pricing tiers.
What the disclosure rules accomplish, in the categories where they have taken effect, is that the household at least sees the price before agreeing to it. That is not nothing. Cumulatively, I have to pay less attention now to whether the hotel I am booking is going to spring a resort fee on me at checkout, because the resort fee is in the headline price. The comparison shopping I do is closer to apples-to-apples than it used to be. The lowest-price option in the search results is closer to being actually the lowest-price option.
What they do not accomplish is the actual reduction of the fee. The Comcast bill, even with the nutrition label, is still $130 a month for what is advertised as a $65 service. The plane ticket, even with the DOT disclosures, is still $387 for what was advertised as a $280 fare. The credit card late fee for the big issuers is still $30 or $41 for being a day late. The household pays. It pays a little less surprised than it used to be. The total is roughly the same.
What I see from here
I run a small business, which means I have spent more time in the last two years staring at payment processing fees than I would prefer. The 2.6 to 3 percent that Stripe or Square or Shopify Payments takes off every customer transaction is, in a real sense, the largest single line item on my income statement after the cost of goods themselves. That money goes to a payment-processing duopoly — Visa and Mastercard together account for roughly seventy percent of the credit card network market — plus the issuing bank and the acquiring bank, both of which are usually one of the same handful of major retail banks that show up in every other installment of this series. When my customers pay $35 for a t-shirt with a card, roughly a dollar of that goes to the payment networks and banks, and that dollar gets passed through in the form of the prices I have to charge to make the unit economics work. The customer pays it. They just do not see it as a fee, because it is built into the retail price.
That is the deeper pattern across all of the fee categories. The visible fees — the resort fee, the seat selection fee, the convenience fee — are the part that the FTC and DOT and FCC have been able to make companies disclose. The invisible fees — the payment processor’s cut, the issuer interchange, the wholesale concentration that lets four meat processors mark up beef however they want — are the part that does not get disclosed because there is no place on the receipt where it would show up. The disclosure-rule strategy works at the surface. The deeper extraction is structural and was not on the Biden FTC’s agenda, let alone the current one’s.
That is the design. The cost did not go away. It moved. From the visible price into the fees, in the categories where the fees were the easiest to pile on. From the visible fees into the invisible interchange, where the household never sees the line item but pays it anyway every time they swipe a card. The household is, every time, the residual claimant on the system, holding the bill that nobody else has to absorb.
The next installment looks at retirement.
Even that's Odd 
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