Your credit card late fee will depend upon the credit card company with which you have your card. For example, some credit unions charge no fee at all or a minimal fee of $15. Some credit card companies charge based on your credit card balance, while other charge a flat fee of $25.
When deciding which card to choose, it is important to know all the fees associated with the card you select. This includes late fees. One way is to use tools on the Internet such as the one available on this credit card finder now!
According to the Federal Reserve, the maximum late fee a company can charge is $25. This law doesn’t apply if you have been late more than one time in a 6-month period. The second late fee can be $35 and after that, the credit card company can charge a late fee of $35 or 3% of your total balance, whichever is greater.
What if my credit card balance is low, will I still have to pay a late fee?
If you have a low balance on your credit card then you probably have a low payment as well. Again, with the laws enacted by the Federal Reserve, credit card companies are not allowed to charge more than your minimum payment as a late fee.
What this means is that if your minimum payment is $12, then that is the maximum amount of money your credit card company can charge for a late fee. The goal is to prevent people who inadvertently miss a payment or who carry low balances from having to pay excessive fees.
Now, since the laws were put into place, you will find that credit card companies have helped to negate this problem by placing a penalty APR on credit card accounts. A penalty interest is typically 5% to 10% more than what you are currently paying in interest and can be as high as 39.99%!
Some credit card companies place this fee on your account temporarily, usually for six billing statements. However, there are some companies that keep the higher interest rate indefinitely, which applies to all purchases made once the penalty APR is applied.
I made my payment but it bounced, will the credit card company charge me a late payment fee and a bounced payment fee?
Actually, the same laws that protect you from exorbitant late payment fees also protect you from getting double fees on your bill. The credit card company has to make a choice between charging you a late fee or a bounced check fee.
Because there aren’t the same restrictions on the bounced check fee as there are on late payment fees, it is very likely that you will be charged the bounced check fee rather than the late fee.
What happens if my late payment fee puts me over my credit limit?
In this case, the credit card company can charge you an over the credit limit fee, if they choose. However, the fee cannot exceed the amount that your credit is pushed over its limit.
In the past, if your credit limit was $600 and you went to $601 the credit card company could charge you a $25 to $35 over the limit fee. Now the company can only charge you a $1 fee, as that is the amount that you are over your limit.
Will a credit card late fee affect my credit score?
Whether a late fee will affect your credit score depends on when you make the payment on your account. A credit card company can and will charge you a late fee the day after your payment is due, although some will wait for 10 days if they offer a grace period.
However, that same credit card company may not report your late payment to a credit-reporting agency for up to 30 days after the payment is due. If this happens and you make your payment before the 30 days are up, then in all likelihood, it will not be reported to the credit agencies at all.
This does not mean that you should make a habit of making late payments. Even if you qualify for the lowest fees, they will add up quickly. What’s more, the penalty APR could end up kicking you in the teeth in terms of increasing your minimum payment and how long it will take you to pay off your debt.
You should not take your creditors word for it if they say they aren’t reporting your late payment to the reporting agencies, you need to see for yourself. You can check your credit report free of charge once a year at the AnnualCreditReport website. You should be checking your report annually to determine what areas are good or bad about your credit as well.
Use the credit card chaser tool to compare credit cards today!
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