A late fee is a fee charged if your payment is received after the due date or with some loans, after the payment grace period. If you have credit on your credit card, your payment is due at least 21 days after the end of the billing cycle. If you make a payment after the due date, or you make less than the minimum payment, you will be charged a late fee.
Some credit cards have staggered late fees based on your credit card balance. For example, if the balance could be $ 15 between $ 0 and $ 500 your late fee or if your balance is over $ 500 your late fee may be $ 30. Other credit cards have a fixed late fee regardless of the credit on your credit card.
The maximum credit card late fee
By law, credit card companies are limited to what they can do for a late fee. Credit card companies may charge a maximum late fee of $ 25 the first time you arrive late or up to $ 35 if you are late on your payment in the past six months. The late fee cannot exceed the amount of the injury. For example, if you are late on a $ 10 minimum payment, your late fee cannot be higher than $ 10. Because of this, many credit card companies have made the minimum payment of $ 25 or more.
Late fees to other accounts
You can also be charged a late fee on loans and lines of credit. If you do not pay the late fee before your next billing cycle ends, your next minimum payment will include the regular minimum payment, the late fee, and overdue payment from the previous billing cycle. Mostly any type of account with a due date charges a late fee if your payment is not made by the due date.
How to avoid a late fee
You can completely avoid late fees by at least paying the full minimum payment before the due date. Sending your payment in advance is important, especially if you mail your payments. If you habitually forget to pay, consider paying term payments through the credit card issuer website or through your bank’s online bill.
You should also pay close attention to your payment when the time is due, especially if you are paying when due. If your payment is made after the cut-off time, even if it is on the due date, you can still be charged a late fee. Credit card companies cannot require your payment to be due before 5:00 pm, and some even accept payments until midnight. Check with your credit card issuer to learn the exact time your payment is due, but avoid cutting this tight.
If it is close to your due date, you can avoid an accelerated payment by paying a late fee by going online or by phone. Lenders often charge an additional fee for accelerated payments, especially if a customer service agent processes your payment to help you avoid a late fee. Fortunately, the accelerated fee is often less than a late fee.
If you are not often late on your credit card or loan payments, your lender can waive the late fee if you ask.