You pay your credit card in full every month. You’re diligent about every aspect of your finances. Fees don’t really matter to you then, right? Wrongo! I’ve been an evangelist for years about the evils of credit card late fees and how they can run you right into thelate fee.jpg ground. Yet, I broke my own damn rule last week and it just plain kills me!

That’s right, with all that is going on in my life coupled with the Labor Day holiday the due date of my credit card came rolling in and whooshing by without a single sound. Even though I do online bill pay, since I don’t have any minimum amount set up to be paid at a given date and I generally do my finances once a month near the beginning of the month, that September 2nd due date went sailing by. I never even noticed until the 3rd when I sat down to do my finances. Then, much to my chagrin, even the near immediacy of online payment couldn’t save my sorry behind. Sure enough, I surfed over to the credit card site and there were my fears realized in plain black and white – LATE FEE $39. OUCH!!

Now, after about ten minutes of beating myself I decided I could either forgive my oversight, let it go, and set up something so I don’t do it again, or dwell in misery. I decided to let it go. After all, I don’t think I have paid anything late in decades and I spent years extolling the virtue of ontime payment to my partner during some questionable money lesson years. I still feel like a hypocrite though. How date I pull such a no-brainer! Goodness only knows if that late payment will affect if they charge interest on new purchases. Since I pay in full every month I don’t tend to worry about it. Yet, I remember once ages ago when I did pay something late, the lateness caused all sorts of new rules to kick in regarding interest calculation. For now, I shelved my Olivia credit card until the cycles blow over. So, tardy folk beware…

It used to be that a late fee would run $15. That was bad enough. Now they are up to $39 or more. I would think long and hard before I splurged on a $40 bottle of wine and I would savor that splurge for what it was – a special treat. Yet, here I was faced with $39 that gave me no value whatsoever other than a chance to be spanked by Bank of America’s computer.

While I believe we need due dates and banks expect and deserve to be paid on time, I wonder if the penalties are really in line with the offense. What does it REALLY cost the bank if you are late? Very little other than some opportunity cost for cash that they could have managed into a quick turnaround investment that given day. Even then, I’d venture a bet they don’t cash manage that tightly that a few thousand here or there really affects their strategy. Several jobs ago I remember working with the cash manager of the company and sitting in on learning how he maximized the company’s return on cash balance with short-term (sometimes less than a day) investment moves. While it educated me on this little known (to me at the time) practice, it hasn’t given me THAT much sympathy for the credit card companies that are just dripping in revenue.

I doubt we’re going to change credit card practices anytime soon, so heed these top tips from BankRate on how to avoid late fees.

  1. Mind Those Payment Rules
  2. Pay Minimum Immediately
  3. Move Your Due Date
  4. Automatic Online, On-Time Payments
  5. Pay By Phone
  6. More Express Options
  7. No Fee if You’re “Good”

Great advice. The only thing I am not sure about though is the automatic minimum payment. Surely I can set that up easily, yet I wonder – if I make a minimum payment by the due date and then pay my balance in full just past that due date, do I incur interest on the average daily balance for that month? Yes, I know I could read all the card details, but honestly even after I pour over them I often end up more confused than clear.

Who knows, maybe the ridiculously high late fees will be declared unconstitutional. Now THAT would be a nice change of heart.

How about you? What are your strategies to avoid late fees?


Paula Gregorowicz is the Comfortable in Your Own Skin(tm) Coach and you can learn more at her website and blog .