Can a creditor charge a late fee for a credit card payment?

In Delaware, creditors are allowed to charge a late fee for credit card payments, as long as it complies with the state and federal laws. Under the Delaware Credit Card Act, a creditor must provide at least a 21-day grace period for a payment to be made on a credit card account. If the payment is not made within the grace period, then the creditor is allowed to charge a late fee. These fees must be “reasonable and proportional” to the amount due, but in no case can it be excessive or exorbitant, such as five times the amount due. The Delaware Credit Card Act also requires the creditor to clearly specify the amount of the late fee in the contract at the time the credit card account is opened. This information must include the amount of the fee, and the timeframe in which it will be due, such as within five days of the missed payment. The fee may also increase at any time, as long as the creditor notifies the cardholder in writing before the increase takes effect. In short, Delaware law allows creditors to charge a late fee on credit card payments as long as it is a reasonable amount and specified in the contract. Cardholders should always read the terms of their credit card agreement and understand the late fee structure before signing.

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Can a creditor charge a late fee for a credit card payment?

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