Is your credit card late fee on the climb?
Aussies who have their credit card with NAB and Westpac might have noticed a bump in late payment fee costs over the last 12 months, according to a Banking Day review.
The review of late payment fees found that NAB and Westpac credit card customers are paying 65% more for their tardy repayment habits on most low rate and loyalty cards, with both banks bumping up their previous $9 charge to $15.
These changes were given the greenlight in July of last year when the High Court ruled that lenders were more than welcome to collect lofty fees from Aussies who aren’t on time with their credit card repayments.
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And the increases were passed on to Westpac’s subsidiary banks with the likes of St. George, BankSA and Bank of Melbourne all following up with the same $15 charge.
The good news is that, according to the Mozo database, the now $15 late payment fee still sits just below the $18 average fee, but is $10 more expensive than the lowest late payment fee on the market.
While the other two members of the big four might not have moved their late payment fees in the past year, you’re not any better off being an ANZ or Commonwealth Bank customer with these providers maintaining a $20 charge for late-paying cardholders.
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The best news to come from the review was that very few customer-owned institutions have boosted late fees in the last 12 months.
If you’re a customer of one of those banks, you’re also probably going to be afforded some leniency after it was revealed that 16 of these credit card providers offer their customers one week to make the repayment before implementing the charge.
If you never want to be hit with a late payment fee, check out Mozo’s top tips to keeping your credit card balance reasonable and your repayments on-time.
Top tips to managing credit card repayments
Don’t overspend - Don’t get yourself into a situation where you can’t afford to pay your balance off in full at the end of each month. Set a budget that you know is payable and stick to it!
Reduce your credit limit - If you’ve busted your budget on more than one occasion, consider dropping your credit limit which will prevent you ending up in this sticky situation over and over again.
Pay your balance of IN FULL - It isn’t enough to make the minimum repayments. While you’ll avoid a late payment fee, you’ll soon be paying interest on your older purchases and that is a pricey mistake.
Automate your repayments - Most providers will allow you to pay your balance either entirely or partially via an automated payment from your transactional or savings account. To find out more on this, check out our dedicated credit card payments guide.
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