By Jason Steele


5 Min. To Read

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Credit card late fees can feel like a slap in the face. Not only are these fees expensive, but cardholders who happen to pay late will also incur more interest charges and may even have a higher penalty interest rate imposed.

Thankfully, there are many strategies that credit card users can employ to eliminate these costly charges. First, cardholders should always make their payments electronically, and never by mail. Not only is mailing a letter less reliable than paying electronically, but it also costs more. In addition, electronic payments can be scheduled precisely, and long in advance, while mail has to be sent early in order to ensure timely delivery.

Another important fact about electronic payments is that they need to be scheduled early when the payment date falls on a weekend or holiday. Although the CARD Act of 2009 forbids credit card issuers from marking payments as late when they are not accepted on weekends or holidays, banks have found a clever way around the wording of this law. Card issuers who claim to accept payments in any form during weekends and holidays, such over the telephone or in person, can make payments due on days that they would not accept payments by mail or electronically. In fact, the CARD Act requires banks to make due dates on weekends and holidays, as it mandates that card holder's payment due date be on the same calendar date each month, ensuring that it will always land on a weekend or a holiday several times each year.

Credit card users can even choose from several cards that waive late payment fees. For example, the Discover it card and the Citi Double Cash card will automatically waive cardholder's first late payment, and the Citi Simplicity and PenFed Promise cards both have a policy of no late payments or penalty interest rates.

These strategies can only take cardholders so far. Most credit card users will have cards that do charge late payment fees, and many will fail to schedule their electronic payments properly. So another tool that many banks offer cardholders are automatic text or email alerts to notify customers when their payments are due. Finally, cardholders can simply schedule automatic an electronic payment from their bank account each month for at least the minimum payment, in order to ensure that they are not in default no matter what happens.

All credit card users will eventually find out that their payment was received late for one reason or another. At that point, their only recourse is to contact their card issuer and ask to have the late fee waived. Fortunately, most card issuers will waive late fees for cardholders in good standing. In fact, many are eager to do so, and for good reason. Credit card issuers routinely pay hundreds of dollars in advertising and marketing expenses, just to acquire one new customer. Having made this investment, credit card issuers are more than willing to forgive an occasional $35 late fee in order to keep their existing customer satisfied. At the same time, this is not considered to be a reliable strategy, and cardholders who abuse their card issuer's generosity will not enjoy it for very long.

Credit card users receive many benefits from these products, but they will always have the responsibility of making their payments on-time. By utilizing all of these techniques, cardholders can meet their obligations while avoiding costly fees.

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