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credit & debt

Beat Credit Card Late Fees

If you're a good customer, call your card issuer and ask for the fee to be waived.

It can happen to the best of us: A credit card bill gets buried in a pile of mail, you miss a payment, and you’re smacked with a late fee. Fortunately, federal rules now limit late fees on credit cards to $25 unless you’ve missed a payment within the past six months, and the fee can’t exceed the minimum payment you owe.

Some issuers have instituted even more lenient policies. For example, the Citi Simplicity card doesn’t charge a late fee, and the Discover It card cuts first-time offenders a break. But even if your card issuer isn’t as forgiving, there’s a decent chance it will waive the late fee if you call and ask. “If you’ve been a good customer, you can flex your muscle,” says John Heath, directing attorney at LexingtonLaw.com, a credit-repair service. The likelihood of getting the fee erased varies, but you may have a better shot if your card is with one of the larger banks, Heath says. And the odds improve if it’s your first late payment. If the lender won’t budge, suggesting that you’ll close your account might do the trick. (But think twice before closing an account: Reducing the amount of credit available to you could hurt your credit score.)

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Regardless of whether you end up paying the fee, make sure you send in at least the minimum payment as soon as possible. Your history of on-time payments accounts for 35% of your FICO credit score -- more weight than any other factor carries. Generally, the longer you go without paying, the more potential damage to your score. If you pay the bill within 30 days of the due date, the lender might not report the delay to the credit bureaus. But if you let the bill go longer than that, the card issuer is more likely to inform the credit agencies and turn over your case to its collections department.

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