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Credit Card Late Fees to Rise in 2019

Credit Card Late Fees to Rise in 2019

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This article was last updated Jan 04, 2019, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.

Credit card late payments are getting more expensive.

Effective Jan. 1, 2019, the Consumer Financial Protection Bureau (CFPB) raised the permissible maximum for credit card late payment fee to $28, up from $27. For subsequent violations made within six billing cycles, the maximum fee that can be charged rose from $38 to $39.

We’ll break down the CFPB’s decision and provide tips on how to avoid late fees.

Why the increase?

Every year, the CFPB makes adjustments to late fees based on inflation. Initially, the Credit CARD Act of 2009 set maximums for late fees up to $25 for the first instance and up to $35 for additional instances within six billing cycles. If you pay on time for six months, your late fee maximum will fall to the lower first-instance fee.

But with the CFPB’s inflation adjustments, maximum late fees tend to fluctuate annually by about $1. Late fees may increase, decrease or remain the same.

When issuers implement the increase

Issuers could begin implementing late fee increases as soon as Jan. 1. But that doesn’t mean your issuer will announce the increase immediately. Some issuers may choose not to increase late fees at all. However, if your issuer decides to increase its late payment fee, you’ll receive a notification stating how much and when the change takes effect. Some cardholders may have already received a notification.

Who is affected?

Nearly all credit cards charge late payment fees, with 99% of banks imposing late fees on credit cards, according to the CompareCards 2018 Credit Card Fee study. So if you have a credit card and miss a payment, you will most likely incur a late payment fee.

While it’s not required that your issuer raise late fees, once one issuer schedules an increase, it’s common for others to follow. Considering many major issuers currently impose the 2018 maximums of $27 for first-time late payments and $38 for subsequent late payments within six billing cycles, it’s likely a few issuers will increase late fees to the 2019 rates.

How to avoid late fees

No one wants to be charged a fee for something that’s avoidable. Here are several ways to avoid pesky late fees:

  • Set up autopay. An easy way to avoid late fees is to set up autopay. By using autopay, you won’t have to worry about remembering to pay your bill each month. Autopay can conveniently be set up for your minimum payment, full statement balance or another amount.
  • Ask your card issuer for a waiver. If you miss a payment, you can call your card issuer to ask if the late fee can be waived. It never hurts to ask, and many issuers can be understanding, especially if this is the first time you’ve paid late.
  • Use a credit card that doesn’t charge a late payment fee. While hard to find, a handful of credit cards don’t assess late fees.

Which cards don’t charge late fees?

While most credit cards charge late fees, some cards don’t, or provide a one-time waiver.

Here are some options, which also have no annual fee:

No late fees ever

  • Up to 1.5% cash back after making 12 on-time payments, 1% cash back on all purchases - right away

  • Build credit without having to put down a security deposit

  • No annual fee, no foreign transaction fees, and no late fees

Highlights
  • Up to 1.5% cash back after making 12 on-time payments 
  • 1% cash back on all purchases - right away 
  • No fees whatsoever. No late fee, international fee, annual fee, or any-other-kind-of-fee, fee. 
  • $500 - $10,000 credit limits 
  • No credit history necessary for approval 
  • Build credit by using responsibly. 
  • Petal reports to all 3 major credit bureaus 
  • Petal's mobile app makes it easy to manage your money, track your spending and automate payments 
  • See if you're pre-approved within minutes without impacting your credit score. 
  • No deposits required. 
  • Card issued by WebBank, member FDIC.

See additional details for Petal Visa® Credit Card

More Info

  • 0%* for 12 months on Purchases*

  • 0%* for 21 months on Balance Transfers*

  • 16.99% - 26.99%* (Variable)

Highlights
  • The only card with No Late Fees, No Penalty Rate, and No Annual Fee… EVER
  • 0% Intro APR on balance transfers for 21 months from date of first transfer. All transfers must be completed in first 4 months. After that, the variable APR will be 16.99% - 26.99%, based on your creditworthiness
  • 0% Intro APR on purchases for 12 months from date of account opening. After that, the variable APR will be 16.99% - 26.99%, based on your creditworthiness
  • If you transfer a balance with this offer, after your 0% Intro purchase APR expires, both new purchases and unpaid purchase balances will automatically accrue interest until all balances, including your transferred balances, are paid in full
  • There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
  • The same great rate for all balances, after the introductory period
  • Save time when you call with fast, personal help, 24 hours a day – just say “representative”
  • Enjoy the convenience of setting up your own bill payment schedule on any available due date throughout the month

See additional details for Citi Simplicity® Card - No Late Fees Ever

More Info

Discover cards assess no late fee the first time you pay late

Here are some popular Discover cards:

  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • Any amount, any time. Cash back rewards never expire*

Highlights
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
  • Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • Use your rewards at Amazon.com checkout.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • No annual fee.
  • See Rates & Fees

See additional details for Discover it® Cash Back

More Info

  • 0% for 18 months on balance transfers & 0% for 6 months on purchases*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • 14.24% - 25.24% Variable*

Highlights
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • 100% U.S. based customer service.
  • Get your free Credit Scorecard with your FICO®
  • Credit Score, number of recent inquiries and more.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • No annual fee.
  • See Rates & Fees

See additional details for Discover it® Balance Transfer

More Info

  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases.

  • Credit line will equal your security deposit of $200 or more*

  • No annual fee, no late fee on your first late payment. No penalty APR*

Highlights
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • We automatically match all the cash back you've earned at the end of your first year.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • See Rates & Fees

See additional details for Discover it® Secured

More Info

Missing a credit card payment happens to most everyone at some point, and it can be a painful lesson. If it’s a first-time offense, consider calling your issuer to waive the fee. Know that even if the fee is waived, your issuer may still report the late payment to the credit bureaus, negatively affecting your credit score. Only time and regular on-time payments will offset the damages.


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