How to avoid credit card late fees
Being late is going to cost you, big
With credit card late fees climbing to
$39, this is no time to be the least bit tardy with your card payment.
These payment tips and strategies from
Bankrate.com will show you how to steer clear of those monster late
Mind those payment
rules. One of the most important things you can do is follow
your card issuer's payment guidelines precisely. These guidelines
are outlined on the back of each credit card bill.
When it comes to processing credit card payments, all these little
details are incredibly important.
Payment guidelines may include everything from a specific payment
address to the time of day by which the payment must be received
to be credited that day. Many issuers also stipulate that payments
must arrive in the preprinted envelope sent to the customer.
While the Fair Credit Billing Act requires issuers to credit payments
the day they are received, each issuer is allowed to set specific
payment guidelines. If any of the guidelines are not met, the issuer
can take as many as five days to credit the payment.
An on-time payment could easily become "late" during
that five-day period, so follow those payment guidelines carefully.
To ensure your payment gets credited immediately:
- Use the preprinted envelope provided by the credit
- Include the billing coupon, and be sure to write
the amount being paid in the box provided.
- Make sure checks are legible and the payment amount
is correct. Sign the check. Write the credit card account number
on the check.
- Send payment with proper postage to the payment
address requested by the issuer. It's a good idea to mail your
payment at least one week in advance of the due date. Ten days
to two weeks prior to a due date is even better.
Pay minimum immediately
The safest strategy for anyone sending a card payment by snail mail
is to pay the bill as soon as it arrives, even if you can only make
the minimum payment. Giving your issuer the 2 percent minimum payment
it wants ASAP is a great way to guard against late fees. And you
can always send a bigger payment when you've got more cash.
Move your due date
Are your credit card bills due at a time of the month when
you're running low on cash? Many card issuers will let you set
your own due date -- if you ask. Why not time it so your credit
card bill arrives right after a paycheck? That way you'll have plenty
of cash to pay your bill each month.
Automatic online, on-time payments
Paying bills online can be a great buffer against late fees.
Most major issuers, including Citibank, MBNA, Discover and American
Express accept online payments. You can sign up for these services
on issuer Web sites. Choose an online payment amount that automatically
covers the minimum amount due on a credit card each month. Next,
choose an automatic payment date well in advance of your credit
card due date. This is a great way to pay credit card bills while
traveling. To keep your interest costs down, you'll want to make
additional card payments online or by snail mail as soon as you
Pay by phone
Paying by phone is a quick and easy way to make a last-minute
card payment. Just grab your checkbook and call the toll-free number
on the back of your credit card. You'll be asked for a check number
and the bank routing number, which is printed at the bottom of every
check. After you're done with the call, rip up the check because
you won't be able to use it again. Many credit card companies accept
payments by phone. Some issuers charge fees, ranging from $5 to
$15 for this service. Be sure to ask.
More express options
If the due date is looming, consider sending a credit card
payment by express mail or wiring the payment with Western Union.
The U.S. Postal Service charges $13.65 for an express mail flat
rate envelope, which guarantees next-day delivery by noon to most
destinations. Wiring your payment will cost you as well. Western
Union's fees for money-wiring service vary depending upon the amount
of payment. These express services, while costly, are still cheaper
than most credit card late fees. Make sure you send your express
payment to the proper address. Many issuers have separate payment
addresses for express payments. The last thing you want to do is
slow the processing of an express payment by sending it to the wrong
No fee if you're "good"
Zapped with a late fee even though you mailed your payment well
before the due date? Call and ask your issuer to waive the fee.
Many issuers will waive late fees as a courtesy to customers with
good payment records.
If all these fee-dodging strategies are too much for you, you may
want to consider getting a card from a credit union or a local community
bank. Smaller card issuers are much more lenient when it comes to
Late fees at community banks range from $10 to $15. Community banks
also accept card payments 10 to 15 days after due dates without
Credit unions give card customers plenty of leeway as well. Generally,
a credit union will accept a card payment 10 days after a due date
without penalty. And if a credit union should charge you a late
fee, it will only be $10.50 on average.