Late Payment Fee in Credit Cards | Impact, Charges & How to Avoid it

Credit card users often encounter various types of charges unknowingly, which can sometimes lead to awkward or frustrating situations. One such common and critical charge is known as the "Late Payment Fee."

What is a Late Payment Fee?

A Late Payment Fee is a penalty imposed on a credit card holder when the payment of the total due or the minimum due is not made within the stipulated time. Specifically, if the payment is not completed by the due date following the billing cycle starting from the statement generation date this fee is applied. In essence, it is a charge for failing to make a timely payment.

Applicable Late Payment Charges:

Each bank has its own Schedule of Charges, which is determined based on regulatory guidelines and the specific category of the credit card.

Therefore, to know the applicable penalty for your particular credit card in case of late payment, it is essential to check the official website of your issuing bank, contact their call center, or consult your dedicated Relationship Manager (if available). Staying informed helps you avoid unexpected charges and manage your credit card more effectively.

Negative Impacts of the Late Payment Fee:

Financial Penalty: Depending on the issuing bank and the type of credit card, the late payment fee typically ranges from BDT 800 to BDT 1,200. Additionally, VAT is applicable as per local regulations, making the penalty amount considerably significant.

Impact on Credit Record (CIB Reporting): Banks report late payment incidents to the Credit Information Bureau (CIB). A negative entry in the CIB report can create serious obstacles when applying for financial services, such as loans or new credit cards from other financial institutions. To learn more about CIB and its importance, Click Here....

Loss of Special Benefits: Many banks offer special benefits to credit cardholders, such as waiving the annual fee based on a certain number of transactions per year. However, if a cardholder incurs a late payment fee during that year, they may become ineligible for these benefits.

Legal Consequences: In the event of prolonged non-payment, the bank has the authority to initiate legal action against the cardholder under applicable laws.

Revocation of Privileges: A history of late payments can also lead to the cancellation of other privileges or offers linked to the credit card. Banks may review such behavior when evaluating eligibility for limit enhancement, promotional offers, or premium services.

How to Avoid Late Payment Fees | Smart Tips for Credit Card Users

Avoiding late payment fees is easier than you think just a little planning and the right tools can help you stay on track. Here are some effective ways to make sure you never miss a credit card payment:

Set Auto-Reminders on Your Mobile Calendar

Use your smartphone’s calendar app to schedule automatic reminders on your billing date. Label it clearly (e.g., “Credit Card Payment Due”) so you receive timely alerts before the due date.

Activate a Standing Instruction from Your Bank Account

Set up a standing order or auto-debit instruction from your bank account. This way, your total due or minimum due will be automatically paid on the due date without any manual action.

Pay Your Bill Before the Due Date

Don’t wait until the last moment. Try to make the payment a few days before the due date to avoid technical issues, weekends, or bank holidays that could delay processing.

Use MFS or Fintech Wallets for Quick Payments

If you're busy or on the go, use Mobile Financial Services (MFS) like bKash, Nagad, or any digital/fintech wallet to pay your bill instantly. These platforms offer convenience and ensure your payments are done on time even outside regular banking hours.

So, Late payment is a harmful consequence for any credit card user. There is no alternative to staying alert and managing payments responsibly.