Late on your payments and getting whacked on fees, over the limit charges, and a default interest rate of more than 20 percent? Unfortunately, you are not alone. Late payment fees and other penalties now account for more than 30% of the credit card companies' profits these days. Even worse, not only are you being hit with a late fee of $35 or more, but you’re also getting a ding on your credit report and potentially a jacked up interest rate. According to Bankrate.com, late fee penalties for credit cards averaged $12.55 in 1994. Ten years later that average has almost tripled ($32.65).

Getting Buried By One Missed Payment

Complicating matters further, many credit card accounts have written in their terms of agreement that missing a payment on another credit card is enough for them to increase the interest on theirs to the penalty rate. Known as the “universal default clause”, this provision is included in most credit card contracts (although Citibank ended it as of mid-2007) and has been the demise of many well-intentioned consumers. With one late payment, consumers who are just affording the minimum payments have seen all of their interest rates increased to as high as 32 percent on all of their cards. In turn, their minimum monthly payments increase, and they are left with no other choices but turning to a third party such as credit card counseling, debt reduction or bankruptcy for debt help.

Stricter Deadlines for Payment Due Dates

Not only is it easy now to get buried by being late on as little as one of your monthly payments, but the credit card companies have now made it a lot easier to be late. Some have set strict deadlines with the hope of causing confusion amongst consumers about when their payment is actually due. Consumers who are not reading the fine print can be blindsided. Thought your payment was due on the 1st of November? Actually, it’s due by 12pm on November 1st.

What to Do – Tips For Avoiding Penalties

First and foremost, read the fine print of your credit card agreement. That’s where you’ll find the terms of the contract in black and white. What to watch out for within the agreement:

1) universal default clause information

2) information about the length of your grace period some banks have shortened this to 20 days

3) the exact deadline for when your payment is due.

Thirdly, if you’re reading this you must have online access. Why not set up an automatic payment with your bank for the bare minimum each month just so you know the payment will be made on time?

Finally, get out of debt. There’s no reason to even have credit cards haven’t you heard? Live on a cash basis and your financial life will be much simpler. It’s that easy!

If you need help getting out of debt, let PayingPaul.Com help. Fill out a form and we’ll match you with a reputable service that can reduce your debt and payments. Start today!