From Medicare premiums to cable TV bills, many fees rise over time. And credit card late fees are no exception.
In fact, federal law allows for certain credit card costs to change as often as annually.
For 2022, the maximum amount that financial companies can charge for the following credit card fees are increasing:
- First late payment penalty: $30 — up from $29 in 2020 (It did not increase for 2021.)
- Subsequent late payment penalty: $41 — up from $40 in 2020 (It did not increase for 2021.)
These changes are effective Jan. 1.
Just note that the above amounts are limitations: They represent the maximum amount that a credit card company can charge for such fees. So, it’s possible that your credit card company won’t hike the amount it charges for these fees.
Why credit card fees rise
Under federal law, the U.S. Consumer Financial Protection Bureau (CFPB) calculates credit card late fee limits annually based on the Consumer Price Index, which is one of the federal government’s main measures of inflation. So, late fee limits can change as often as every year.
These limits apply to open-end consumer credit accounts, not credit accounts that are secured by a home.
Avoiding credit card late fees
The only surefire way to avoid credit card late fees is to quit using credit cards — an impractical solution for many consumers.
The best practical preventive measure, then, is probably to set up automatic payments.
You should be able to do that by logging in to your account online. But if you can’t figure it out, contact your credit card company’s customer service department.
When I log in to my credit card account, for example, I can choose one of three amounts to be paid automatically every month on my bill’s due date: the minimum payment, the statement balance or a dollar amount of my choice. Choosing even the minimum payment would be sufficient to avoid late fees.
Paying anything less than the full balance, however, generally results in interest charges. If you aren’t paying your credit card bills in full each month, you might want to consider transferring the balances to a no-interest credit card.
You can find and compare such cards using a free online resource like Money Talks News' credit card search tool. Or, simply check out the cards highlighted in “Here’s How to Stop Paying Credit Card Interest.”
If you ever incur a late payment fee or other credit card fee, ask your credit card company if it will waive the fee. A 2019 CompareCards survey found that among cardholders who had asked for a waiver of a late payment fee, 87% received it.