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New Mexico State University

New Mexico State University

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Watch Out For Special Credit Card Fees

LAS CRUCES -- To make up for lowering introductory interest rates, credit card companies have been raising their late fees, said a New Mexico State University consumer education specialist.

"If you have a credit card, more than likely in the last few months you received notice that your late fee charge was going up from $15 to $20," said Susan Wright with NMSU's Cooperative Extension Service.

Credit card companies also are changing the timing of the late fee, Wright said. In the past, late fees were not a major concern because the company would wait up to 30 days past the due date to record the late fee. Now the time period between the due date and getting charged a late fee can be as short as one day.

The over-the-credit-limit fee is another cost credit card companies may have raised. This fee is charged when the balance exceeds the credit line. Companies allow credit card users to go over the limit and then they charge for the privilege, Wright said. The fee, usually $20 to $25, is charged every month until the balance is back within the credit limit.

Some credit card companies now charge a fee if a card is not used during a specific period of timeƑoften up to a year. Fees also may be charged if the monthly balance is paid in full. "After all, if you aren't paying them interest on your balance every month, they aren't making much money off of you," Wright said.

The length of the "grace period," or number of days allowed before interest is charged on purchases, may also have changed, she said. A period of 25 days has been the norm, but some companies have recently changed that period to 20 days.

Today's credit card users need to be very careful to keep up with the terms of credit card providers, Wright said. Special conditions can be added and fees can be changed at the will of the company.

"Paying your credit card bill as soon as possible after it is received is a good idea," Wright advised. "Always check your statement against your credit card receipts for charges that you did not make. Disputed charges are usually resolved, but you may pay interest on them before the problem is solved."