Credit card late payment and overlimit fees

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

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.

Using a balance transfer to avoid overlimit fees

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.

Compare no-fee credit cards

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Petal® 2 "Cash Back, No Fees" Visa® Credit Card		$0	None			Build your credit with rewards and no fees: Apply if you're new to credit or have a fair to good score of 600 or higher. See if you prequalify with no impact to your score.	Apply now View details	Compare	loading Fetching your data...
First Technology Federal Credit Union Platinum Rewards MasterCard®		$0	None		None	Earn 10,000 points after spending $2,000 on purchases in the first 60 days from account opening.	View details	Compare	loading Fetching your data...
Navy Federal More Rewards American Express® Card		$0	None		None	Earn 25,000 points after spending $3,000 in the first 90 days from account opening.	View details	Compare	loading Fetching your data...

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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.

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