Back in more prosperous days, banks only charged a late fee if cardholders were more than 30 days late with a credit card payment. Fees were usually about $15.
These days, card holders now get hit with fees even if they are only a few days late, and fees now run $40 to $50.
Pay the fee and the cardholder admits guilt, and gets dinged on his or her credit report.
Not All Fees Are Deserved
What credit cardholders often do not know is that the bank would rather keep customers with decent credit than receive the occasional late fee. As long as the cardholder is not a chronic late payer, the fee is negotiable.
So, late fees can be rescinded for cardholders who:
- have decent credit.
- own more than one credit card.
- usually pay on time.
- have an average or above-average credit rating.
More Than One Line of Credit
For cardholders who have one credit card, it's usually easy to obtain more, and there are a wide variety of good reasons for having more than one card. Here are a few of them:
- Use one card while paying one off. Just don't "see-saw" debt from one card to another.
- Keep one just for emergencies.
- Increase debt-to-credit ratio, which is a key component of a credit rating.
- Close one account if the bank applies unfair late fees.
Get the Fee Eliminated
For a cardholder whose payment was late by 30 days or more, the best option is to pay the fee. But for the cardholder who was only a few days late, try calling the bank to get the fee eliminated.
Here's the best technique:
- Call the toll-free number on the back of the card.
- Tell the customer service representative that the late fee was applied to a payment that was only a few days late.
- Tell the rep that this is not appropriate customer service, and ask them to rescind the fee.
- If the bank rep or a manager resists or says they cannot rescind the fee, tell them to close the account. Make sure they note that the account was closed by the cardholder, not the bank.
Closing one card will not adversely affect a credit rating, and having other cards will prevent loss of available credit. The credit cardholder will still have to pay an existing balance for a closed account, as well as the late fee if the bank refused to eliminate it. At least the cardholder let the bank know what he or she thought of the bank's predatory late fees.
But many banks are willing to work with credit card holders and would rather keep a customer than receive a fee. One phone call eliminated an needless fee and preserved the cardholder's credit rating.
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