Credit Card Glossary
Late Fees
Late Fees are charged when you are overdue in making a monthly payment to your credit card.
Late fees are a major source of income for credit card companies with some late fees being well over 60 dollars per transgression. However the average for late fees is around $15 for balances up to $100 and $35 on balances of $1000 or more.
You can see how the credit card companies clean up with this when you realize that most households carry a debt of $9000 from month to month. In fact the total industry revenue from late fees went from 1.7 billion dollars in 1996 to 7.3 billion dollars in 2001.
There are some other things you should know about late fees. If you decide to mail in your payment mail it in at least ten days before the due date as any delay can have it marked as a late payment. So send your payment with sufficient leeway to arrive at the credit card company long before your bill’s due date.
Another thing to watch out for is that some credit card companies don’t receive and process mail until after 1:00 p.m. thus the real date by which your monthly payment must be received is in actuality a day earlier than the date indicated on your contract. So in order to avoid a late fee you must make sure your payment gets there by snail mail at least three days ahead of the due date.
Here is yet another hitch that can cause a late fee to your credit card account. If your envelope contains a paper clip or staple the fine print in most credit card contracts stipulates that it may take an extra five to ten days to process your payment! If this happens then you can also be charged a late fee even if they are the ones who are tardy about opening mail that cannot be automated because of a tiny piece of metal!
Late payments are also dangerous to your credit and debt level because they can trigger penalty interest rates as high as 29%. Even if you are timely in your payments to the issuer of one credit card your rates can be raised this high if it is reported that you are late with a payment to another creditor.