A recent report from the Government Accountability Office estimated that about 70 percent of the credit card industry’s revenue comes from interest and penalty rates, with penalty rates accounting for a growing portion. Senate Banking Committee Chairman Christopher Dodd (D-Conn.), meanwhile, noted that for 2006, banks are expected to collect a record $17.1 billion in credit card penalty fees, up 15.5 percent from 2004 and up 906 percent from the $1.7 billion it collected in 1996.

Senate targets credit card practices - Jan. 26, 2007

Just to follow up briefly on yesterday’s rant on credit, I’ve always wondered how much these companies make from transaction fees, and how much comes from penalties and interest payments. Now I know…70% from penalties! They’ve got America by the balls.