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Alternative Credit Card Issuers


Look for alternatives to the traditionally large banking institutions that offer credit cards.  Smaller card issuers, credit unions and local community banks often charge lower fees, are more flexible and are often more service oriented.


Late fees and over-the-limit fees at community banks usually are about $10 to $15.  Also, community banks often do not charge over-the-limit fees if the consumer exceeds the limit by a few dollars.  Some community banks will impose an over-the-limit fee only when a consumer exceeds his or her credit limit by 10 percent.  Many community banks also offer grace periods of 10 to 15 days for late payments.  Credit unions also provide more consumer friendly guidelines.  They often offer grace periods of 10 days and often charge less than $15 for late fees and over-the-limit fees.


Avoiding Late Fees


Late payments will be costly to the consumer.  Some card issuers charge as much as $39 for late payments.  The following strategies will help you to steer clear of late fees.


1.    Be Aware of Payment Rules


Follow your credit card issuer’s guidelines exactly.  The guidelines are outlined on the back of every credit card statement.  The details are extremely important and must be followed.


The guidelines include a specific payment address, the time of day that payment must be received to be credited for that day, and in some cases the requirement that the preprinted envelope must be used for sending payments.  Credit card issuers are required to credit payments the day they are received.  However, each card issuer can set specific payment guidelines.  Failure to comply with the guidelines may result in the creditor, who is permitted to do so, taking as many as 5 days to credit the payment.  Thus, an on time payment can become late.


To follow the most frequently listed guidelines the consumer should:


a.Use the preprinted envelope and affix proper postage.

b.Include the billing statement and write the amount being paid in the section where it is required.

c.Write checks legibly and double-check that the amount is correct.  Sign the check.  Write the credit card account number in the memo section of the check.

d.Mail the payment at least 7 days before the due date.  10 to 14 days is better and may be necessary during the winter holidays.


2.   Timely Pay At Least the Minimum


Pay the minimum payment and try to mail it out as soon as possible after you receive your monthly billing statement.  Send more than the minimum when possible.


3.   Move Credit Card Due Dates that Conflict with Other Bills


For many consumers credit card bills are due at the same time of the month as other bills.  At that time of the month consumers usually do not have much cash on hand because of the number of bills due.  Moving the due date to another time of the month can solve this cash crunch, preferably a few days after your payday.


4.   Online Payments


Paying your bills online will help you to avoid late fees.  Most major credit card issuers accept online payments.  You can sign up for this service at the card issuers’ websites.  You can make the payments one time or set up the payments for an automatic monthly date and for the minimum amount due each month. This process also works well for consumers when they go on vacation.


5.   Phone Payments


A phone payment, commonly referred to as a “pay by phone”, is a fast and easy way to make your payments.  This method works for last minute payments when the consumer does not have sufficient time to get the payment to the creditor by mail.  The consumer is required to provide a checking account number and a bank routing number.  This information is located on the bottom of every check.  You should void the check after you complete the transaction over the phone.  Some credit card issuers charge fees ranging from $5 to $15 for the transaction.  Ask your credit card issuer about any fees for this transaction.


6.   Other Options


Other options available when a due date is dangerously close include express mail, courier or Western Union.  The U.S. Postal Service charges about $14.00 for an overnight package, which usually guarantees next day delivery.  However, if you send the package later in the day, the chances increase that your package will arrive later the next day or, for some destinations not until the day after.  It is important to ensure that the package is sent to the proper address.  Payments sent to the wrong address likely will not arrive at the credit card payment center, thus causing the payment to be late or missed.  The U.S. Postal Service permits you to track the package to ensure that it arrived on time.  Western Union charges high wiring fees.  However, these fees should pale in comparison to late fees and other negative effects of late payments.


7.    Fee Waivers


Some credit grantors will waive late fees if the consumer is late for the first time.  These requests are granted usually if the payment arrives only a day or two late.  Consumers with good payment records are often granted the courtesy of a one-time late fee waiver.  Many community banks or credit unions charge smaller fees and also, in some cases, do not impose penalties if payments arrive late.







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New Jersey, 07753

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