Oct 2007

Four Reasons to Request Late Fee Forgiveness

Late fees on credit cards have increased steadily throughout the past ten years. Most credit card issuers have begun raising their late fees to as high as $39. If you have been late on your first credit card payment, then there are ways to get around it.

Did you know that most major credit card issuers will forgive a late payment? Here are four reasons why you should contact your credit card issuer when you make a late payment.

  1. The late fee could be eliminated. An extra $39 might not seem like a big deal when you are facing hundreds of dollars in minimum payments. To put it in perspective, this could save you nearly enough money for a full tank of gas.
  2. You can avoid an interest rake hike. Most credit card issuers will increase your interest rate up to the default rate if you are late on a payment. Getting the credit card company to forgive the late fee can keep the interest rate locked at your current rate. This may not seem like a low rate now, but imagine if you let them raise your interest rates to 25 percent or higher. Many routinely raise your rate to a default rate as high as 32 percent.
  3. Your credit is not damaged. Ordinarily, if you incur a late fee, there is a potential that your credit card issuer may report the account as delinquent. This depends on the extent of the delinquency. A more severe delinquency, such as missing the payment entirely will normally appear as a 30 day delinquency. However, if you can prove that you never got the statement, or show some other good reason for missing the payment, many credit card issuers will forgive it as long as you catch it up immediately. Considering that a late payment can stay on your credit report for 7 years, this action carries a lot of importance.
  4. You can avoid universal default. Many credit card issuers now check your credit report as frequently as once per month when you have an account with them. This account review inquiry is done to check your overall credit standing. Credit card issuers are checking to see if you are falling behind on one of your other credit card accounts. If so, then they can raise your interest rate substantially, even if you have never been behind on their credit card. What this means is that if you have 5 credit cards and are late on one of them, you could see your interest rates (and minimum payments) jump on all 5 credit card accounts.

As you can see, there are important reasons to proactively request late fee forgiveness from your creditors. If this is your first late fee, make sure that you contact your creditor with a promise and a plan to bring the account current immediately. Ask them to waive the late fee and get your payment to them within 48 hours.

If you have had a late fee before, you may still be able to receive forgiveness for the late payment. Many credit card issuers will forgive one late payment per year. Some go as far as to forgive one late payment per 6 months.

It definitely pays to contact your credit card issuers to request forgiveness for any late payment. Infrequent late fees are somewhat routinely waived by many major credit card issuers. Frequent late fees however are not normally forgiven. If you find yourself chronically late on your credit card payments, you should consider seeking the assistance of an Accredited Credit Counselor.

Credit counseling may be necessary in order for you to re-establish current payment status. Some plans allow you to get back on track on your own, which enables you to keep your credit cards open. Other plans may require you to close the accounts as part of a debt management plan. Regardless of what option you choose, you can get help to eliminate late fees altogether. This is the first step to stabilizing your financial situation and beginning your path to debt repayment.

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