Question: Usually I pay all my credit card bills on time, but occasionally it happens that due to some reason I miss the due date by a day or two. So my question is that are these exorbitant $35 late fees fair practice?

Answer: For this question I’m going to start out on the bank’s side. A credit card in its real sense is a line of credit. The bank has made a commitment with you that it will continue to lend you money up to your credit line, and so you have also made a commitment with your bank that you will pay them back. When you don’t pay your bill on time, the bank begins to wonder if you’re going to pay it at all. So by penalizing cardholders for late payment by them, two things are done simultaneously by the bank one is that it trains you to make timely payments and the other is that doing this it gets periodic affirmation of your commitment to repay them. OK, so negative reinforcement is not liked by anyone, and $35 is a quite expensive reminder. Particularly when the banks use a couple of late payments as an excuse to raise the interest rate on your credit card.

So what you should do now? First of all, you should make a call to the credit card company. Tell them that you have decided to move the account if they don’t revoke the late fee. That thing will work the first time, but if it is your second time then it won’t work. Then you should ask yourself that why you are late with these bills. In order to fit your monthly budget flow you may need to organize the due dates .

Here I am giving you some more tips on avoiding late-payment fees.

Question: Is that possible that a credit card company continue to charge over-the-limit fees on an outstanding balance of a closed account?

Answer: First of all, you should keep in your mind that you can’t close an account that possess an outstanding balance. However, you can notify the credit card company that you want the account to be closed to new purchases. Interest charges and fees are not counted as purchases so they can continue to increase the outstanding balance.

May be the credit card companies have such ability to not authorize purchases that would put your account over its credit limit. So if you have anything that is above your credit limit then either it was done with their authorization or interest and fees might be taking the balance over your limit. It doesn’t matter that how the fees got there, they aren’t illegal.

It is not possible that the credit card company may help you with your problem. As you’ve closed the account to new purchases, so now they know very well that you are not their long-term customer. Now, they will just try to make what money they can off the account before that you pay it off or before it goes into default.

Considering Transferring Balances

You can not afford the consequences that will arise if you do not pay down this debt. I just hate to see that you go in to credit counseling just for this one debt as it has negative effect on your credit report, but it is necessary for you to find some way to make this stop. What I am going to suggest you is that you should apply for a new credit card and, if you get success in getting one then you should transfer the balances away from your current credit card.

First you should check your credit report. Then if it need any corrections then get it corrected. Then on Bankrate search for a new credit card. Then you should apply for only one suitable card. Your credit report show all credit applications, and if you have multiple applications and denials then this will hurt your ability to get credit in the future.

Right now you are actually more concerned about the new card’s credit line rather than the interest rate because right  now you need a bug credit line in order to make you able to transfer the balance and close the old account, so you should not chase a low introductory rate that you won’t qualify for. Just if you have become able to put the $35 a month then you were paying in fees toward paying down the balance will help out a lot.

Credit Counseling

If in case you do not qualify for a new card, then may be your best solution will be the credit counseling. A a repayment plan can be negotiated by your credit counselor with your creditors and he might be able to reduce the interest rate on your debt. Definitely they will be able to stop the over-the-limit fees.

Mostly there are agencies that are nonprofit, but that doesn’t mean that they won’t charge you a fee in order to put together a budget and repayment plan.

You can find a credit counselor in your area by the help of The National Foundation for Credit Counseling or they may even counsel you online. When meeting with a credit counselor the FTC has a list of questions to ask.