Credit cards and late fees go hand in hand in the credit life of a person. It is hard to find a single person who has not been slapped with a late fee. It is such intriguing and hard to avoid. It is fine when you are fined a late fee once or twice. But, it becomes painful and negative when late fees are regularly charged.
How late fees can affect you?
Late fees are charged when you fail to pay the minimum balance of credit card. Each card has its stipulated minimum balance structure, depending on the credit limit and so. Generally, the minimum balance remains at 4% of the total balance and it is to be paid by the due date. However, if you fail to do so, a fee will be imposed on your total balance which will take your pending balance higher along with interest rates. So, on one side, your balance will be bigger and you will continue to chase your balance. Moreover, if late fees are regularly charged, the outstanding balance can exceed your credit limit, which in result, will cause you over-limit fees making your total pending balance go higher and higher. If this sequence persists, then you won’t be able to come closer to paying off your debt.
The worst impact the late fees can have is that your credit can be revoked from any credit privileges and you can no longer use your card. However, you would remain liable to pay the outstanding balance until it is paid off. This is badly pinching you. Along with exorbitant finance charges, you have to keep on paying towards your balance. If you are still unable, more late fees and over limit fees will be levied. And, this precarious situation goes on for six months or so, your account will be charged off. This will very badly affect your credit report. Your credit report will drastically go down and you may not be able to get any credit privileges from any company in the near future and the credit issuing company will report your credit history to the credit bureaus.
How can you avoid being charged with late fees?
The best way to beat the late fee blues is to pay your bills on time. You should have a track of your payments to different companies and their due dates. Keep a log of them in your computer or in any notebook. If you post the payment, then pay them much ahead of the due date to avoid any postal delays. If you pay through your checking account, make sure you have the sufficient amount and your payments do not fall on any national or bank holiday. You can also opt for auto-deduction payment system from your checking account for the minimum payment. Make this arrangement with your credit card lenders. This will definitely help you of not being in pressure of missing the payment before the due date.
Finally, if you are charged with a late fee, you can ask your issuer to waive it. However, they will not do it again and again. Hence, you need to be careful in the credit card management and pay off your debt on time.