What Should You Know About Credit Card Late Payment Fee?

In the bustling heart of Singapore, where the city’s vibrant energy meets the calm of the waterfront, one of the most common financial challenges we face is managing our credit card payments. Credit cards are a popular form of payment in Singapore, offering convenience and flexibility in our everyday spending. 

However, as we navigate the complex financial landscape, it is not uncommon for some to find themselves incurring late credit card payments. There are common reasons for late credit card payments, each with its own set of challenges. Let us delve into these common triggers and discuss ways to avoid them.

Common reasons why people make late credit card payments:

Overspending

This is the most common reason for late payments. When you spend more money on your credit card than you can make a full payment each month, it can be difficult to keep up with the payments.

Unexpected expenses

Sometimes, unexpected expenses, such as a medical bill, car repair, and any emergency expenses, can make it difficult to afford your regular bills, including your credit card payment.

Forgetting to pay

It is easy to forget to pay some bills, especially if you have many to pay each month. However, there are a number of ways to remind yourself of your due dates, including setting up automatic payments or calendar reminders.

Financial hardship

If you are experiencing financial hardship, such as job loss or a reduction in income, it may be difficult to afford your credit card payments. If this is the case, you should contact your credit card issuer to discuss your options and find a way to solve this issue.

What is a late payment fee?

A late payment charge is a fee that is levied by the credit card issuer if you do not make at least the minimum payment on your credit card bill by the due date.

How much is a late payment fee?

The amount of a late payment charge may vary. Typically, it costs around S$100.

When will a late payment charge be incurred?

A late payment charge is incurred if the minimum payment on your credit card bill is not received by the due date. The due date is typically 25 calendar days after your statement date.

How can I avoid a late payment fee?

The best way to avoid a late payment charge is to make at least the minimum payment fee on your credit card bill by the due date. You can set up automatic payments from your bank account to ensure that your payment is always made on time.

What to do if you are charged a late payment fee?

If you are charged a late payment fee, you can try to contact your credit card issuer and request a waiver. However, there is no guarantee that a fee waiver will be agreed.

Other potential consequences of late payment

In addition to late payment charges, late payments on your credit card bill can also damage your credit score. A good credit score is important because it can affect your credit score for loans and other forms of credit at competitive interest rates.

Tips to avoid late payment charges on your credit cards:

• Keep track of your credit card spending and due dates. You can use a budgeting app or simply mark your calendar with the due dates for all of your bills.
• Set up automatic payments from your bank account to your credit card account. This will ensure that your payment is always made on time even if you forget to pay bills.
• If you are unable to make the full payment on your credit card bill, try to make at least the minimum payment by the due date. This will help to avoid late payment charges and damage to your credit score.
• If you are struggling to keep up with your credit card payments, contact your credit card issuer to discuss options such as a payment plan or a reduction in your interest rate.

What happens if a late payment is charged and apply for a new card?

It is generally not a good idea to suggest that you apply for a new credit card. This is because applying for a new credit card will result in a hard inquiry on your credit report, which can lower your credit score. Additionally, if you are struggling to manage your credit card payments, it is unlikely that you will be able to manage payments on a new credit card.

Instead, it is better to suggest that you focus on paying off your existing credit card debt and improving your credit score. This can be done by:

• Making at least the minimum payment on all of your credit cards on time each month.
• Paying more than the minimum payment on your credit cards whenever possible.
• Consolidating your credit card debt into a single loan with a lower interest rate.
• Avoiding opening any new lines of credit until you have paid off your existing debt.

Once you have paid off your debt and improved your credit score, you may be able to issue for a new card with more favorable terms.

Tips for Singaporeans who are struggling with late credit card payments:

• Contact your credit card issuer to discuss your options. The issuer may be willing to waive late fees or work with you on a payment plan.
• Seek financial counseling from a reputable organization. A financial counselor can help you create a budget and develop a plan to pay off your debt.
• Consider debt consolidation. Debt consolidation can help reduce the monthly payments and make it easier to manage debt.

It is important to remember that you should be honest with yourself about your financial situation. Moreover, you should only apply for a new credit card if you can handle your current financial burden.