Wed 26th Sep, 2007
Avoiding Credit Card Fees
Credit card providers are now required to show customers just how much interest they are being charged and have been limited to charging customers only £12 on late payments. Although the late payment charges have been reduced there are many customers who are failing to meet their monthly payments, with a total of £230 million being charged in late fees last year. Some may miss their payment simply because they have forgotten, whilst others are struggling to make ends meet on bills and loan repayments. Some may think that a £12 late fee is not much, however the late payment charge is more than an irritant.
If you miss a credit card payment you will find that you will not only be charged the £12 fee, but you may also lose the special rate on your credit card. Often credit card issuers reserve the right to raise your credit card interest rate if you break the terms and conditions of your contract, which will end up costing you more than just a mere £12. You may also discover that your late payment will affect your credit report, and if you miss more than one, lenders may look upon this as a negative mark against you putting you at risk of attracting higher interest rates on other financial products, such as mortgages and personal loans.
One way of ensuring that your payments are made on time is by setting up a direct debit. This way your credit card bill will always be paid on time and you can easily avoid any credit card late-payment fees.