Beat Credit Card Companies at Their Own Game!

by Daryl Flagg

Have you ever wondered how much money a credit card company
makes? Have you ever wondered how much of that comes from late
fees? Everyone has and if you haven’t you should because most
likely you own a credit card, which means that these late fees
has or could directly affect you.

As you have probably taken notice, credit card late fees are on
the rise and have been so for awhile. There is enormous
competitive pressure on credit-card interest rates and annual
fees, and this has given way to a fee frenzy. For credit card
issuers, late fees now represent their third largest revenue
stream, (interest revenues and merchant fees rank first and
second, respectively). In essence, those who pay late are now
covering the costs for those credit card users who do not carry
a revolving balance and those who file for bankruptcy.

So how much are credit card companies making from issuing late
fees? Over the years we have watched the number of late fees
charged to consumers jump to record-high levels. Late fees can
range from $10 to as much as $40. The average late fee more than
doubled since 1996 from $13.28 to $29.84. In fact, many major
card issuers are now charging a $35 late fee. Let’s assume that
100,000 people made late payments for a particular month and
they were charged a late fee of $30 for doing so. This would add
up to $3 million in revenue. As you can see, credit card
companies are making a lot of money off of card holders and
there is no slow down in sight regarding the increase in late
fees.

Credit card companies are making a killing off the late fees
they issue to their customers and they don’t mind doing it
because their ultimate goal is to make money. They are like any
other for-profit business in that they sell a product or service
for revenue. In the case of credit card companies, the product
happens to be credit. These companies aren’t just some “thing”
sucking up as much money as they can. These “things” are run by
man. And wherever man is involved, greed also becomes involved.
These people are just like you and me. They may have a family to
support, bills to pay, etc. Most people don’t work just for the
pure enjoyment, but for money, a source of income. And the more
income we achieve the easier and better our lives become,
supposedly.

Some of you may be asking, “So what do we do about the late
fees?” Well there’s an article that I wrote awhile back that you
may be interested in. You can find this article at
http://www.nextmonthonline.com/WhitePapers/Article1.aspx . It
addresses several methods and tips to avoid having to pay a late
fee. One method in particular that I would like to address
further in this article is the Skip-a-Payment technique. If you
happen to know that you can’t pay your credit card bill for a
particular month just skip it. Next Month Online is an
independent company from credit card issuers. They allow their
visitors to skip a payment for a nominal fee. This fee is
generally 70% than your typical late fee. You will accrue no
late fee and no bad mark on your credit report. Credit unions
often offer this type of service for loans or mortgages, but
first you have to fill out an application and then you need to
qualify. With Next Month Online, there is no application to fill
out and everyone qualifies as long as they have a credit card.
Credit card companies are not very happy with Next Month Online
because they are losing money every time someone uses the Skip a
Payment service. This is by far the best service you can use if
you know you will be late because you save a lot of money and
avoid all the hassles that come with bad credit.

Credit card companies are not backing down from increasing fees.
They, for some reason, do not see us as people who make mistakes
once in awhile or people with other priorities in our lives.
They want their money and they want it now! This is the reason
you should not back down either. Hit them where it hurts, their
pocket books. If you know you will be late for a particular
month, just use a skip a payment service because the credit card
companies will no longer be taking money from you, you will be
taking money from them.

About the author:
About the Author Daryl Flagg is the founder and CEO of Next
Month Online. Next Month Online is a service that allows its
visitors to skip credit card payments. They can be found at
http://www.NextMonthOnline.com. Sign up for free!