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Late Fee
Definition
A late fee is a charge imposed by a lender or service provider when a payment is not made by the due date.
Explanation
Late fees are charged on credit cards, loans, utility bills, and rent payments. They typically range from $25-40 per occurrence. Beyond the fee, late payments can trigger penalty interest rates (29%+ APR on some cards) and damage your credit score if reported after 30 days.
Setting up automatic payments or payment reminders helps avoid late fees. Some issuers waive the first late fee as a courtesy.
Example
Missing a credit card payment deadline results in a $35 late fee. If the payment is 30+ days late, it's reported to credit bureaus and can lower your score by 100+ points.