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Higher Balances Equal Higher Late Fees
Many large credit issuers have been slowly raising their late fee
charges. The late fee structure is tied to the revolving balance on the card.
Quite simply, those with higher balances pay higher late fees. Most credit card
companies issue a $15 late fee to payers with a balance of less than $100, but
consumers with balances over $1000 don’t fare as well. For example, Chase
Manhattan card holders with balances less than $150 will face a $15 fee, a balance
of $150 and $1,200 will cost you $29, and those with balances over $1,200 will
pay $35 in late fees.
The credit card companies justify the higher
costs due to the higher risks associated with larger balances.
If a consumer with a $5,000 balance stops paying, the credit
issuer takes a large financial hit. Accumulating a $35 late
fee on top of what you already owe only sinks you further
in debt. To help you avoid late payment fees altogether:
- Pay the bill as soon as you receive it.
- Investigate online bill paying.
- Write the credit card account number on the check and make sure payment amount is accurate. Make it as easy to process as possible.
- Follow payment guidelines as outlined by the issuer on the back of each credit card bill.
- Use the preprinted envelope provided by the credit card company. The routing code on the front will expedite delivery through the post office.
- Include the billing coupon and be sure to write the amount being paid in the box provided.
- Send payment with proper postage at least ten days in advance of the due date to the payment address requested by the issuer.
- If the due date is looming, send the payment by express mail or wire the payment with Western Union. Some credit card companies will accept a check by phone if you contact them.
- Read your credit card agreement thoroughly and be knowledgeable of their late fee policy. Make sure to read any amendments that accompany your monthly statements. As with all else in life, ignorance of the rules does not exempt you from payment.
Source: Staff Writer
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