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Credit Card Late Payment Fees Explained

Credit card issuers charge late fees if you don’t pay at least the minimum amount due by the due date. You’ll have about 25 days each billing cycle, also known as the grace period, to make sure this doesn’t happen.

Late fees are added to your outstanding balance, which can result in higher interest charges and hurt your credit score.

 

How high can my late payment fee be?

All credit card issuers operate under the rules outlined in the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009.

The CARD Act defines a reasonable late fee as $25, or $35 if one of your last six payments was also late. Issuers can charge higher late payment fees if they can prove to regulators that their collect costs require it.

Your late payment fee can never be higher than the minimum payment you missed. For example, if you missed a minimum payment of $15, your late payment can’t be more than $15. Generally speaking, most credit card issuers cap late payment fees at $39.

We analyzed late payment fees associated with 75 credit cards.

 

Results Of Our Late Payment Fees Analysis

Pie chart of late payment fees

89% of the cards we looked at charge cardholders up to $39 per late payment.

Some cards waive the late payment fee the first time you’re late.

Of the 75 credit cards we looked at, 9 (12%) didn’t charge a late fee for the first missed payment.

In any event, your billing statement must clearly show your due date and late fee your issuer will charge if you miss it.

 

When is my payment considered late?

Your payment isn’t considered late unless it was received after 5 p.m. on the day that it was due. As stated in the CARD Act, issuers can’t change payment dates. Due dates must occur on the same day every month, like the 15th or the first day of the month.

The due date could fall on a Sunday or holiday when the issuer doesn’t accept mail. In this scenario, your payment can’t be considered late unless it’s received after 5 p.m. on the next business day.

If for some reason, your payment is delayed in the mail, issuers can mark your payment as late based on the day they receive it. In this situation, ask your issuer to waive the fee since it was not your fault the payment was late.

Card issuers can’t charge late payment fees for 60 days if they made any change to their address or any other procedure related to handling cardholder payments.