Credit Card companies revising their late fees structure

It would seem that credit card companies are bent on squeezing out the regular customer every cent they make. Even the most creditworthy customer could be shafted if a late payment is made.

According to Bill Hardekopf of lowcards.com, credit card companies are adding a third-tier for late fees. For example, Chase now charges $15 on balances up to $99.99, $29 on balances between 4100 and $249.99, and $39 on balances over $250.

Remember about the Fed reducing interest rates by 0.5 percent. That is good news for consumers, but the bad news is that the credit card companies are slow to pass the lower rate to them. They would calculate the finance charge on the rate before for the current billing month or possibly the next month, before the new lower APR kicks in.

As for the rest of the credit cards:

Discover: After October 1, the late fee will be $19 on balances up to $250, and $39 on balances over $250.

Bank of America: $15 on balances up to $100, $29 on balances over $100 up to $250, $39 on balances over $250.

AMEX: $19 on balances up to $400, $38 on balances over $400.

Capitol One: $19 on balances up to $100, $29 on balances of $100 up to $1,000, and $39 on balances of $1,000 and over.

Citibank: $15 on balances up to $100, $29 on balances of $100 up to $250, and $39 on balances of $250 and over.

A cash advance? Discover just boosted their cash advance rate from 20.99 to 22.99 percent. Chase charges 28.24 percent on its standard accounts. Household Bank MasterCard has a cash advance rate of 25.15 percent. Blue from AMEX and Sun Trust's Visa charge 23.34 percent.

Remember, there is usually a transaction fee of 3 percent or more on top of that outrageous interest rate.

Also, the worst penalty is the default rate. If you make a late payment on any bill or loan reported to the credit bureaus, you could see your interest rate skyrocket to the default rate — even if you have a perfect payment record with that card.

Fortunately, Citibank announced it was eliminating universal default. Capitol One said it did not have a universial default penalty. Chase charges 32 percent.

Of course it is important to pay on time. But still, some of late fees are outrageous and would be detrimental for consumers caught in some financial strain.

MSNBC - Why are credit card rates still out of control?

http://www.lowcards.com/
http://www.bankrate.com/
http://www.cardweb.com/