Good Credit’s Non-Effects on Credit Card Fees
So, you would think that obeying the credit card rules all your life, making your credit card payments on time, and staying on top of all things credit card-related in your life would result in credit card companies issuing you fewer fees – or at least lower ones – and, you think, maybe treating you slightly better, right? Wrong.
Credit card companies frequently state that the amount of interest and fees they charge you on your credit card account are directly linked to the intensity of financial risk they put on their shoulders when extending a line of credit to a consumer. Risk, in this context, is assessed according to a person’s credit history and score – in essence, your entire credit card life. In fact, recent studies have actually confirmed that credit card late fees applied by these credit card companies have much more in common with the credit card issuer than its cardholders’ risk of bailing on their payments.
Interestingly, the credit card study revealed that there are typically just a couple of factors that significantly – and directly – affect the frequency and amount of late fees charged by the credit card issuers. The first is the classification of the credit card issuer, and the second is the intensity of aggression the credit card company implements.
They’ve found that the type of credit card-issuing institution that is offering lines of credit is a crucial factor in the dollar amount charged for late fees. Credit union’s late fees are typically nearly one-half the amount of late fees charged by banks; charging $20 for a late payment, as opposed to a nearly $40 late fee, respectively.
Additionally, the aggressive credit card companies feature significantly larger late fees than the more passive companies. If you continue to receive notices in the mail for promotional offers, you’ll know that these are the credit card issuers chagrining absurd late fees and collecting more aggressively, as well.
When seeking credit cards without high late fees – especially if you’re scared of making a late credit card payment – then investigate how your potential credit card issuer advertises to its potential target market. The more aggressive the credit card company is in promoting their services, the higher their late fees. Carefully contrast different company’s credit card policies before signing up for a credit card.