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Credit card late payment and overlimit fees

Credit card late payment and overlimit fees

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Learn more about late payment and overlimit fees, as well as how to avoid them.

When your credit card payment is late or you go over your available credit limit, you will more than likely be subject to a fee from your credit card company. To spend past your credit limit, you will need to consent to overlimit charges.

When you miss a payment on its due date, you will incur a late payment fee on your next billing statement, typically between $25 and $35. Late payment fees are very common and can directly affect your interest rates. The overlimit fee is generally $25 for the first offense and $35 for the second offense within six months. Your fee cannot be larger than the amount exceeding your credit limit.

How to avoid late payment and overlimit fees

Budgeting is a great strategy to help avoid these penalty fees as it allows you to keep track of your balance and set money aside to at least meet the minimum payment by the statement due date. In addition to establishing a budget, there are other specific strategies you can use to avoid these fees.

Overlimit fees

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This is a fee that allows you the convenience to spend past your credit limit. However, many banks will not allow you to spend past your credit limit, so this fee may be nonexistent.

  • Check your balance. Either plan your purchases so you don’t exceed your credit limit or make a payment between statement periods so you can avoid spending past your limit.
  • Limit your spending. Manage your money and avoid going over your actual credit card limit by setting customized spending limits on your card. Some Internet and mobile banking apps also let you set spending limits per transaction.
Watch your spending

If you have a card with a credit limit of $5,000 and regularly spend $5,000 per month on your account, there is a high risk that you’ll go over your limit. To reduce the odds, consider a credit limit increase or pay for some of those expenses with a debit card instead.

Late payments

If you don’t pay at least the minimum balance required by the due date, a fee could apply and you may then be charged for each billing period until a payment is made. Interest will accrue on both the original balance and the penalty charges.

  • Autopayment. You can arrange an autopayment by logging into your online banking account and setting up a recurring withdrawal towards your credit card . You can also call your bank or complete and send in an autopayment form. Autopayments will become active after one statement cycle.
  • Contact your provider. If you’re strapped for cash and the due date on your statement is approaching, you could call your credit card provider to explain the situation. In some cases, you may be able to get a one-time extension on your payment without fees or other penalties applying.
Budget to beat late payments

If money’s tight, budgeting can help you make at least the minimum monthly payment each month. If you had a $5,000 balance, a minimum payment of 2% would be $100 a month or $25 a week. If you know this, you can set aside this amount when you’re paid so you have enough for the payment by the due date on your statement.

Look at our guide to budgeting to better understand your finances in just a few minutes.

What else do I need to know to avoid late payment fees?

Most credit card providers have algorithms to determine when a late payment fee should be charged. But this could mean there are times when a fee applies even if you’ve paid more than the minimum amount for your statement period, as the case study below shows.

Late payment fee charges even after payments

Emilia has a credit card with a statement period that begins on the 1st of the month and ends on the 30th of the month, with her payments due on the 14th of the next month. She is at the start of her statement period for November and owes $0 on her card. Throughout the period, she makes the following transactions:

DateDescriptionAmountBalance
November 1Payment for last statement$1,000+$0
November 8Flight booking$800– $800
November 14Payment towards balance$800+$0
November 20Electricity bill$300– $300

Emilia doesn’t spend any more money for that statement period and is issued with a statement on the 30th of November. While she still owes $300, she has already made two payments for that statement period, so she decides to wait until her next payday on the 20th of December before paying any more.

Emilia finds that she has been charged a late payment fee of $20 because she had not made a payment after the due date on the statement period. As she is a loyal customer, the bank reverses this fee as a gesture of goodwill and now Emilia makes sure she always makes at least one of her payments after the due date on her statement to avoid further issues.

Spending over your credit limit by a couple of dollars isn’t going to cost much (if anything), but financial institutions will still charge when you miss a payment. Missing credit card payments can impact your chances of getting approved for other types of financial products such as a home or car loan.

Make the most out of features such as autopayments to make sure your payments are always on time.Back to top

Compare credit cards

Rates last updated June 21st, 2018
Name Product APR for Purchases ( Purchase Rate ) Intro APR for Balance Transfer Annual fee Product Description
Amex EveryDay® Credit Card
14.74% to 25.74% variable
0% Intro APR for 15 months
$0
Earn 15000 Membership Rewards® Points after you use your new Card to make $1,000 in purchases in your first 3 months.
Deserve® Classic Card
24.49% variable
$39
Designed to help build credit history with no deposit required and access to benefits.
Apply now Read review
Bank of America® Cash Rewards Credit Card
14.74% to 24.74% variable
0% Intro APR for 12 statement closing dates (with whichever is greater, $10 or 3% balance transfer fee)
$0
Earn more cash back for the things you buy most.
Blue Cash Everyday® Card from American Express
14.74% to 25.74% variable
0% Intro APR for 15 months (with whichever is greater, $5 or 3% balance transfer fee)
$0
Earn $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive the $150 back in the form of a statement credit.
Luxury Card Mastercard® Black Card™
16.49% variable
0% Intro APR for first 15 billing cycles (with whichever is greater, $5 or 3% balance transfer fee)
$495
Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
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Chase Sapphire Preferred® credit card
17.49% to 24.49% variable
$0 annual fee for the first year ($95 thereafter)
Earn 50000 points when you spend $4,000 on purchases within the first 3 months of your account opening, and an additional 30,000 points when you spend a total of $30,000 on purchases within the first year of your account opening.
Indigo® Platinum Mastercard® Credit Card
23.9% variable
$75 annual fee for the first year ($0 to $99 thereafter)
With this card you get a 23.9% variable APR.
Apply now Read review
The First Access VISA® Credit Card
29.99% variable
$75 annual fee for the first year ($48 thereafter)
Access credit even if you have poor or limited credit history.
Apply now Read review
Luxury Card Mastercard® Gold Card™
16.49% variable
0% Intro APR for 15 billing cycles (with the amount of each transfer, $5 or 3% balance transfer fee)
$995
Earn points every time you spend. Luxury Card enhances your purchasing power by providing you with one (1) point for every one dollar ($1) you spend. Every purchase gets you closer to the rewards you want.
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Chase Sapphire Reserve®
17.49% to 24.49% variable
$450
Earn 50000 BONUS POINTS after spending $4,000 on purchases in the first 3 months from account opening* — that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
Credit One Bank® Visa® with Free Credit Score Tracking
17.49% to 25.49% variable
$0 to $75 first year annual fee for the first year ($0 to $99 thereafter)
Get 1% cash back rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV, terms apply.
Apply now Read review
Amex EveryDay® Preferred Credit Card
14.74% to 24.74% variable
0% Intro APR for 12 months (with whichever is greater, $5 or 3% balance transfer fee)
$95
Earn 15000 Membership Rewards Points after you use your new Card to make $1,000 in purchases in your first 3 months.
Chase Freedom Unlimited® credit card
16.49% to 25.24% variable
$0
Earn unlimited 1.5% cash back on every purchase – it's automatic. No minimum to redeem for cash back.
Bank of America® Premium Rewards® Credit Card
17.49% to 24.49% variable
$95
Earn unlimited 2 points for every $1 spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
Quicksilver® from Capital One®
14.49%, 20.49% or 24.49% variable
0% Intro APR for 15 months (with 3% balance transfer fee)
$0
Earn unlimited 1.5% cash back on every purchase, every day
Chase Freedom® credit card
16.49% to 25.24% variable
0% Intro APR for 15 months (with whichever is greater, $5 or 5% balance transfer fee)
$0
Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate and unlimited 1% cash back on all other purchases.
Bank of America® Travel Rewards Credit Card
16.49% to 24.49% variable
$0
20,000 online bonus points offer. Ditch the restrictions of typical airline rewards cards. Any airline, any hotel, anytime. No blackout dates.
Chase Slate® Credit Card
16.49% to 25.24% variable
0% Intro APR for 15 months (with $0 for transfers in first 60 days. Then $5 or 5% balance transfer fee)
$0
Jumpstart your financial fitness! 60 day introductory balance transfer offer, save on interest, and get your free monthly credit score.
Venture® from Capital One®
14.49%, 20.49% or 24.49% variable
$0 annual fee for the first year ($95 thereafter)
Earn 50000 bonus miles once after spending $3,000 on purchases within the first 3 months from account opening.
HSBC Cash Rewards Mastercard® credit card
14.49%, 18.49%, or 24.49% variable
0% Intro APR for 15 months (with whichever is greater: $10 or 4% balance transfer fee)
$0
Earn unlimited 1.5% cash rewards on all purchases. See Rates and Fees
Apply now Read review

Compare up to 4 providers

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Kyle Morgan

Kyle Morgan is a writer and editor for finder.com who has worked for the USA Today network and Relix magazine, among other publications. He can be found writing about everything from the latest car loan stats to tips on saving money when traveling overseas. He lives in Asbury Park, where he loves exploring new places and sipping on hoppy beer. Oh, and he doesn't discriminate against buffalo wings — grilled or fried are just fine.

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US Credit Card Offers

Important Information*
Deserve® Classic Card
Deserve® Classic Card

APR

24.49
variable

Annual fee

0 For the first year
More info
Luxury Card Mastercard® Gold Card™
Luxury Card Mastercard® Gold Card™

APR

16.49
variable

Annual fee

995 For the first year
More info
The First Access VISA® Credit Card
The First Access VISA® Credit Card

APR

29.99
variable

Annual fee

75 For the first year
More info
Indigo® Platinum Mastercard® Credit Card
Indigo® Platinum Mastercard® Credit Card

APR

23.9
variable

Annual fee

75 For the first year
More info
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