Consumer Payment Card News

Late Fees

All of the nation’s top ten bank credit card issuers, including American Express and Discover, have raised late fees during the last three years by an average of 23%. During this same period, the number of VISA and MasterCard accounts past-due has soared 50%, from 12.3 million to 18.5 million. In the spring of 2001 nine of the top ten issuers charged a $29 late fee. In April 2004, five issuers charge $35 and four issuers assess a $39 late fee. The average late fee charged by the top ten issuers in April 2001 was $29.60, compared to $36.50 in April 2004. However, unlike 2001, all of the top issuers now have tiered late fee structures, which provides some relief to consumers very, very low balances. Most issuers assess their highest tier late fee if your outstanding balance is more than $1,000. Chase sets a $250 balance, and Providian a $200 balance as the trigger point for their highest late fees. In March of this year, the American Bankers Association reported that credit card delinquency, based on the number of accounts 30+ days past due, hit an all-time high of 4.43% in the last three months of 2003. There are currently 417 million VISA and MasterCard credit card accounts, compared to 368 million in the spring of 2001. (This does not include the 72 million accounts held by Discover and American Express.) As issuers fine tune their credit card portfolios in the coming months, in anticipation of the higher funding costs, watch out for late fees getting bumped up to at least $39.

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|_3. CREDIT CARD LATE PAYMENT FEES|
|_. | 2001 | 2004|
|_. 1. Citiban | $35.00* | $39.00*|
|_. 2. MBNA | $29.00 | $39.00*|
|_. 3. Bank One | $29.00 | $34.00**|
|_. 4. Chase | $29.00 | $35.00***|
|_. 5. Discover | $29.00 | $35.00*|
|_. 6. Capital One | $29.00 | $35.00*|
|_. 7. Am Express | $29.00 | $35.00*|
|_. 8. Bnk of Amer | $29.00 | $39.00*|
|_. 9. HSBC/HH | $29.00 | $35.00*|
|_. 10. Providian | $29.00 | $39.00****|
|_. AVG | $29.60 | $36.50|
|_3. *for balances over $1,000;|
|_3. **for balances over $1,200|
|_3. ***for balances over $250;|
|_3. ****for balances over $200|
|_3. Source: CardWeb.com’s CardWatch (www.cardwatch.com) |

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