A max charge is the legal ceiling on what a creditor, collector, government agency, or provider can lawfully impose on you. Those ceilings come from a patchwork of federal statutes, state usury laws, and agency rules, and they cover credit card late fees, interest rates, wage garnishment, debt collection add-ons, tax penalties, surprise medical bills, and criminal fines. When a number on a bill or notice looks wrong, the question is almost always whether it clears one of these caps.
Credit Card Late Fees
The Credit Card Accountability Responsibility and Disclosure Act of 2009 requires that late fees be “reasonable and proportional” to the missed payment. The Consumer Financial Protection Bureau publishes safe harbor dollar amounts issuers can charge without individually justifying the fee. As of the most recent published adjustments, the safe harbor is $30 for a first late payment and $41 if you miss a second payment of the same type within the next six billing cycles.1Federal Register. 89 FR 19128 – Credit Card Penalty Fees (Regulation Z) These figures adjust annually for inflation.
There is also a hard floor of protection. An issuer cannot charge a late fee that exceeds the minimum payment due on your account.2Consumer Financial Protection Bureau. 12 CFR 1026.52 – Limitations on Fees If your minimum payment is $15 and the standard safe harbor is $30, the most you can be charged is $15.
Interest Rate Ceilings
State usury laws cap what a lender can charge, though the specific ceiling depends on the loan type and jurisdiction. Some states set general limits between 6% and 10% for consumer loans, while others carve out exceptions for payday lenders and retail credit that push allowable rates well above 36%. Penalties for exceeding a state cap range from forfeiture of all interest earned to the loan being declared void.
Why Your Credit Card APR Ignores Your State’s Cap
Under the National Bank Act, a nationally chartered bank can charge the interest rate allowed by the state where it is incorporated, even when lending into states with stricter caps. The Supreme Court confirmed this in Marquette National Bank v. First of Omaha Service Corp. Major issuers incorporate in states like Delaware or South Dakota, where ceilings are high or nonexistent, then lend nationwide at those rates. That is why a resident of a 10% usury state can still carry a card at 24% APR.
The 36% Cap for Service Members
Active-duty service members and their dependents get a federal ceiling that overrides most state exceptions. The Military Lending Act caps the Military Annual Percentage Rate at 36% on most consumer credit, including credit cards, payday loans, and installment loans.3Office of the Law Revision Counsel. 10 USC 987 – Terms of Consumer Credit Extended to Members and Dependents The MAPR calculation is broader than a standard APR because it folds in application fees, credit insurance premiums, and debt cancellation charges.4Consumer Financial Protection Bureau. Military Lending Act Residential mortgages and auto purchase loans are excluded.
How Much of Your Paycheck Can Be Garnished
When a creditor wins a judgment, federal law limits how much of your paycheck they can take. Under Title III of the Consumer Credit Protection Act, garnishment for ordinary consumer debt cannot exceed the lesser of two amounts: 25% of your disposable earnings, or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage. With the minimum wage at $7.25, that protected floor is $217.50 per week.5Office of the Law Revision Counsel. 15 US Code 1673 – Restriction on Garnishment Earn less than that in a week and your wages cannot be garnished at all for ordinary debts.
Child support and alimony orders allow deeper cuts. If you support another spouse or child not covered by the order, the cap is 50% of disposable earnings. If you support no one else, it rises to 60%. Either limit increases by 5 percentage points when the support obligation is more than 12 weeks overdue.5Office of the Law Revision Counsel. 15 US Code 1673 – Restriction on Garnishment “Disposable earnings” means what remains after mandatory deductions like taxes and Social Security, not voluntary deductions like retirement contributions.
What Debt Collectors Cannot Add On
A collector cannot tack on fees that were never part of the original deal. Under the Fair Debt Collection Practices Act, a collector may not collect any amount beyond the principal obligation unless the fee is expressly authorized by the original credit agreement or permitted by law.6Office of the Law Revision Counsel. 15 USC 1692f – Unfair Practices Processing fees, convenience charges, and collection surcharges that appear on a notice but never appeared in your contract are violations.
The CFPB has specifically targeted “pay-to-pay” fees, where a collector charges extra for paying by phone or online. Those are prohibited unless the original agreement authorizes them or a specific law permits them.7Consumer Financial Protection Bureau. Advisory Opinion on Debt Collectors’ Collection of Pay-to-Pay Fees
If a collector violates the FDCPA, you can sue for actual damages plus statutory damages of up to $1,000 per individual action.8Office of the Law Revision Counsel. 15 USC 1692k – Civil Liability The $1,000 cap covers the statutory penalty alone; provable actual damages are recovered on top of that.
Maximum IRS Penalties
IRS penalties stack faster than most people expect. The two most common ones hit you for filing late and paying late, and they run at the same time.
- Failure to file: 5% of the unpaid tax for each month or partial month the return is late, capped at 25% of the tax owed.9Internal Revenue Service. Failure to File Penalty
- Failure to pay: 0.5% of the unpaid tax per month, also capped at 25%.10Office of the Law Revision Counsel. 26 US Code 6651 – Failure to File Tax Return or to Pay Tax
When both penalties apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay amount, so the combined maximum is 5% per month for the first five months.9Internal Revenue Service. Failure to File Penalty After five months the filing penalty maxes out, but the payment penalty keeps accruing. File on time even if you cannot pay. The filing penalty is ten times steeper per month than the payment penalty.
Accuracy-related penalties apply when you understate your tax liability. Negligence or a substantial understatement triggers a penalty of 20% of the underpayment.11Internal Revenue Service. Accuracy-Related Penalty If the IRS proves fraud, the penalty jumps to 75% of the underpayment attributable to the fraudulent conduct.12Office of the Law Revision Counsel. 26 US Code 6663 – Imposition of Fraud Penalty Once the IRS establishes that any portion of the underpayment is due to fraud, the entire underpayment is treated as fraudulent unless you prove otherwise.
Medical Bill Limits Under the No Surprises Act
The No Surprises Act, in effect since 2022, caps what you owe for emergency care and for certain services delivered at an in-network facility by an out-of-network provider. Your plan cannot charge you more than your in-network cost-sharing amount for these services, and the provider is barred from balance billing you for the difference.13U.S. Department of Labor. Avoid Surprise Healthcare Expenses: How the No Surprises Act Can Protect You What you do pay counts toward your in-network deductible and out-of-pocket maximum.
If you are uninsured or paying out of pocket, you have the right to a good faith estimate before scheduled care. When the final bill exceeds that estimate by $400 or more, you can dispute the charge through a federal arbitration process, and the provider cannot send the disputed amount to collections while the dispute is pending.
Statutory Maximums for Criminal Fines and Sentences
Every criminal offense has a statutory maximum, the worst-case sentence a judge can impose. In the federal system, offenses are classified by letter grade based on the longest prison term authorized:14Office of the Law Revision Counsel. 18 USC 3559 – Sentencing Classification of Offenses
- Class A felony: life imprisonment or death
- Class B felony: 25 years or more
- Class C felony: 10 to less than 25 years
- Class D felony: 5 to less than 10 years
- Class E felony: more than 1 year but less than 5 years
- Class A misdemeanor: 6 months to 1 year
Federal fines follow a separate schedule. An individual convicted of any felony faces a maximum fine of $250,000; a Class A misdemeanor that does not result in death carries a fine ceiling of $100,000.15Office of the Law Revision Counsel. 18 US Code 3571 – Sentence of Fine When the statute defining the offense sets its own fine, the court applies whichever amount is greater.
Judges rarely impose the statutory maximum. Federal sentencing guidelines set a narrower recommended range based on offense severity and criminal history, and the statutory maximum functions mostly as a reference point during plea negotiations. The gap between that ceiling and the likely guideline range is often large.