Credit Card Late Fees: How to Avoid Them

Even if you’re diligent about paying your bills on time, mistakes can happen. Credit card late fees are no exception. A credit card company can charge a late fee of up to $29 for the first late payment and up to $40 for subsequent late payments (though the fee cannot exceed the minimum amount due). Late fees can hit you as soon as the first day you’re late.

Basically, it’s better for your wallet if you avoid late fees on your credit card. The following tips can help even the most absentminded credit card customer avoid late fees.

1. AVOID PAYING LATE IN THE FIRST PLACE

The best way to avoid credit card late fees is to not miss a payment in the first place. If you pay your credit card bill whenever it occurs to you, this isn’t the best method for paying on time. Here’s how to avoid paying late:

• Automatic bill pay: Many credit card companies offer automatic bill payments. Your bank account is debited automatically on a predetermined day every month. Automatic bill payments can be set up to charge you the minimum payment, the full amount or a fixed amount.
• Schedule a reminder: In case automatic payments encroach upon your cash flow, you can set a calendar reminder in your phone or email to remind you to pay your credit card bill on a monthly basis (or biweekly, weekly, etc.). Time the reminder to strike when you have enough in your bank account to pay the bill.
• Change your payment date: If your credit card bill is due when your bank account is low, you may be able to request a change in the due date. Set your due date for a couple days after payday when you have enough cash to pay your bill.
• Mail your payment in early: Do you still pay your credit card by mail? In this case, mail the check well in advance of the due date. Some credit card companies determine whether your payment is late based on when they receive it, not when you send it. Make sure you understand your credit card issuer’s policy.

2. CHOOSE A CARD WITH NO LATE FEES

Some credit cards waive late fees for the first late payment or don’t charge late fees at all, so you don’t have to worry about paying extra if you’re late. Make sure to make your payments on time because your credit card issuer may charge you a penalty APR if you’re late (check your cardmember agreement). If you are 30 days past due on a payment, your credit report will show it.

3. CALL AND NEGOTIATE

If you call and ask, your credit card company may be willing to reverse a late fee. Before you call your credit card issuer, make your payment or at least be prepared to pay over the phone. Let them know you have resolved the issue, and you are taking steps to prevent it from happening again. Make sure you mention if you’ve never missed a payment before – or if it’s been a long time. There is a good chance they will work with you.

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