An Important Guide to Credit Card Late Payment Charges

  • Published on: 21 Nov 2023
An Important Guide to Credit Card Late Payment Charges

Credit card late payment charges are one of the charges an issuer levies when you don’t clear your bills on time. While credit cards offer many benefits, these charges can increase your financial burden. Therefore, you must be careful of them. 

Nevertheless, knowing the charges for late payment is crucial when you have to deal with unexpected financial obligations. Moreover, this helps you know the benefits of avoiding credit card charges for late payments!

Read on to learn about late payment penalties and more. 

What are Credit Card Late Payment Charges?

Whenever you make a transaction from your credit card, the amount is added to your outstanding balance. This amount dictates your minimum due amount, credit card late payment charges and other billing details. You can find all this information in your credit card statement. 

Issuers decide this penalty amount based on the total outstanding balance and their internal policies. Considering this, you must keep your credit card usage to a minimum to avoid a high penalty on your card. Thankfully, lenders allow you to avoid the penalty by paying the minimum dues. 

Also Read: Learn To Use Credit Card Responsibly

Reasons to Pay Your Credit Card Bill on Time

Here are a few reasons why you should pay your credit card bill on or before the due date:

  • Late payment will increase your debt obligation in the next cycle. 
  • If you pay your bill 60 days after the due date, your issuers can charge higher interest on future purchases.
  • Not paying dues or paying only the minimum amount will carry your outstanding amount to the next billing cycle, which will attract interest. This will add to your existing debt. 
  • Late payments affect your credit score negatively and a low score may cause difficulty in getting loans or credit cards in the future. 
  • As you delay your payments, the interest continues to accumulate until you clear your bill.
  • If a credit card company marks you as a defaulter, this remark will show on your credit report and further decrease your credit score. 

Also Check: Personal Loan Online

Tips to Avoid Late Payment Charges

Now that you know why you should pay your bills on time, here are a few tips on how to implement it:

Opt for the Auto-Debit Facility

Auto-debit is an opt-in facility where you give the card issuer permission to deduct the billing amount from your savings account. Opting for it can help you pay your bills on time as per the due date. However, make sure you maintain the required balance in your account for the transaction to go through.

Pay the Minimum Due Amount

Life can be full of surprises, so it is possible that you may fall short of cash once in a while. In such cases, issues allow you to pay only the minimum due on your total bill and avoid late payment charges. The minimum due amount is generally 5% of the total outstanding balance. Paying this amount keeps your card active, so you can continue using its services.

Set a Reminder

Note your bill payment date and set a reminder on your calendar, via email or on your phone. You can also set the reminder a few days before the due date. This will give you the time to arrange the required cash if needed. 

Communicate with your Credit Card Company

In case you are unable to pay on the due date, it is best to talk with your card issuer for an extension. Note that issuers only levy late payment charges three days after the due date, as per RBI guidelines. But if you need more time, informing your card issuer and getting their confirmation is important.

Armed with this knowledge, avoiding credit card late payment charges is easy. If you plan to get a credit card with attractive benefits, look no further, as the most-awaited Fibe Axis Bank Credit Card is here! 

With features such as up to 3% cashback on all spends, complimentary access to domestic airport lounges and fuel surcharge waivers, you can enjoy numerous perks. Download the Fibe’s Instant Loan App or register through our website to apply for it today. 

FAQs on Credit Card Late Payment Charges

What is the penalty for a credit card late payment?

The credit card charges for late payment depend on your card issuer’s policies. They are calculated based on your total due amount. So, if you have a high outstanding balance, your late payment penalties may be higher and vice versa. 

What happens if I am 3 days late on my credit card payment?

In this case, you will have to pay the penalty levied by your issuer. You can also talk to the issuer’s representative via customer care to see if you can get an extension. 

What happens if I pay my credit card bill 1 day late?

As per the mandate by the Reserve Bank of India, credit card issuers can charge a penalty only after three days past the due date. So, if you are 1 day late on paying your credit card bill, the card issuer will mark your bill as ‘past due.’ However, they will not add late charges.


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