In 2005, statistics have been recorded that card members have paid approximately $12 billion in penalties and fees. This could be from late charges to increases in interest rates, either way, it can be concluded that some of the cardholders might not have understood fully what their charges and fees would be when they got their credit cards.

It is a federal law that the consumer must be made aware of all fees and penalties; however, they are normally disclosed in very small print on the reverse of the application. Sadly, many people don’t pay enough attention to the fine print or even take the time to see the exact extent of their possible penalties.

The best way to find the hidden penalties and fees that are associated with your credit card is to read the member agreement very carefully. Even if it requires a magnifying glass to see the small words, you must understand the consequences before they occur. Sometimes the fee disclosure is even printed in a grey color and that makes it more difficult to read, let alone fully understand. Credit card companies can charge ridiculous amounts for certain things and also change the initial interest rate. It is advantageous to know exactly what you are getting yourself into, before you sign the agreement.

You should pay very close attention to the late fees that the credit card company has listed and the penalties that could be associated with those late fees. There are a variety of ways that these companies can slam you with an unexpected penalty. The late fees for your specific credit card can range from fifteen to forty dollars, although it isn’t just the cost of the late fee that you should worry about. Some companies retain the right to raise your interest rate if the payment is not received on time. This could mean paying a whole lot more towards your credit card without even significantly lowering the balance.

Something else that consumers may not be aware of is that some credit card lenders can actually raise your interest rate if they find out that you have been late with other creditors. The bottom line with this practice is that even if you pay your credit card bill on time every single month, but are late with another lender, the interest rate on your credit card can be raised.

Another detrimental penalty that could be placed without even being noticed is caused by accidentally going over your credit limit. If you go over your limit, there will most likely be a fee charged and could possibly be grounds for raising your interest rate. Unintentionally accruing late fees could put you over the allowed limit and the card issuer will have the right to raise the rate of interest on your credit card.

The best way to avoid late fees and the penalties that are associated with late payments is to write your check the day you receive the credit card statement in the mail. After you have written out the credit card payment, get it back into the mail and it will help avoid any late fees. Another option to get around paying late fees and being late with your payment is to sign up with online bill pay. Most credit card banks and lenders have a system for automatically paying the minimum balance online every month. If they do not have an online payment system available, check with your local bank and enroll with them. You probably won’t be able to get around every single charge, but keeping on top of payments will be a good start in avoiding the hidden penalties and fees with your credit cards.

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