An Important Guide to Credit Card Late Payment Charges

Credit card late payment charges are one of the many pieces of information about a card that you need to be aware of. Issuers levy this 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.

Knowing the charges for late payment is also crucial when you have to deal with unexpected financial obligations. It helps you prioritise your finances and makes managing a cash crunch easier. 

Read on to learn about late credit card payment penalties and more.

Introduction to Credit Card Late Payment Charges

All transactions you make using your credit card are recording in a billing cycle. All of these are added up, and this results in your total outstanding balance. Credit card late payment fees apply when you do not pay either the total balance or the minimum amount due by the due date. 

The minimum due is usually 5% of your total dues. Paying it helps you avoid credit card late payment fees. That being said, your balance still attracts interest. Paying the full amount due is the only way you can avoid paying interest. 

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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 fees will increase your debt obligation in the next cycle
• Not paying dues or paying only the minimum amount will carry your outstanding amount to the next billing cycle, which will attract interest, which will add to your existing debt
• If you pay your bill 60 days after the due date, your issuers can charge higher interest on future purchases
• It affects your credit score negatively, which makes getting loans or credit cards in the future difficult
• 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 Read: Top Credit Card Bill Payment App

Tips to Avoid These 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

This is an opt-in facility where you give the issuer permission to deduct the billing amount from your bank account. Opting for it can help you pay bills on time as per the due date. However, it’s important to maintain the required balance in your account for the transaction to go through.

• Pay the Minimum Due Amount

As life is full of surprises, it’s possible that you may fall short of cash once in a while. In such cases, issues allow you to pay only a portion of on your total bill and avoid credit card overdue 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

If you’re 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.

Knowing this, it’s easy to avoid credit card late payment fees. If you plan to get a credit card with attractive benefits, look no further. Opt for a Fibe Axis Bank Credit Card to enjoy attractive and lucrative benefits.

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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.

How can I find out the due date for my credit card bill payment?

You can easily find the due date for the bill, along with other details, on your monthly credit card statement. You can also access this information by logging into your card account online or via a mobile app.