Since 1996 late fee revenue generated to bank card companies has increased from $1.7 billion to a whopping $7.3 billion dollars. In fact, credit card companies are making most of their profits from late fees than ever before. And as if there weren’t enough for these banking giants, many companies have increased their late fee from $29.00 to $35.00. This is in comparison to a much lower late fee rate of just over $13.00 in 1996. Most consumers are getting hit with these outrageous late fees because credit card companies have reduced their grace period from 29.7 days to 21.2 days.
What can a consumer do to avoid a late fee?
-The first step is to simply call the credit card company and asked to have it waived. Most companies will waive one late fee per year. Companies want to keep your business, but you often have to be insistent.
-Make sure you allow at least five days for your payment to reach the credit card company. There’s nothing more frustrating that getting slapped with a $35.00 late fee for being one day late.
-Try just making the minimum payment when you first receive the bill. Then you can pay a higher amount closer to the due date if you are in a financial position to do so.
-Pay online. Many credit card companies will post your payment the very same day you make the payment (usually provided you pay before 3:00 pm).