In most cases, you'll not only pay a late payment fee that could run up to GBP 12 or more, you'll also see your interest rate on that credit card rise, sometimes as much as 15%. It can get even worse than that. As card companies and other lenders take to "universal default" clauses, a late payment on one credit card can bump up the interest rates on ALL of your credit cards, costing you more money every month for as long as you hold those credit cards.



In fact, says Apacs, in 2006, credit card holders in the UK paid out over GBP 88 million in late payment fees alone. That doesn't take into account all the extra interest that's being paid out by UK card holders. That's why the best advice you'll ever get about using and managing credit cards is to pay your account as soon as the bill comes in every month without fail.

But that's still not the worst of the news. Card companies are among those most likely to report late payments to the credit reporting agencies, where it will reflect against your credit record. Late and missed payments on your credit record can affect your ability to get credit in the future. In many cases, if you are offered credit in the future, either as a loan or through a card issuer, you'll pay higher interest rates than those who have never had a late payment. Your late payments lower your credit score, which can affect you with anyone who is entitled to do a credit check on you. That number can include prospective and current employers and prospective and current landlords, as well as mortgage companies and other lenders. Those late payments can have a very far reaching effect.

One of the easiest ways to be certain that your account is paid on time each month is to set up a direct debit payment. When you choose to pay your credit card by direct debit, you can be certain that your account payment is always made on time, and avoid late fees and all the attendant headaches that come with them. Setting up a direct debit payment isn't difficult. You simply notify both your bank and your card company that you wish to set up a direct debit payment for the bill. There's a bit of paperwork, and it's all set. You'll always be notified before the debit notice is sent to your bank, and you can often switch back and forth between paying the full amount due, the minimum amount, or another specific amount designated by you as a pre-approved monthly debit.

If you're considering applying for a credit card, you should compare all the offers online but also look at the small print which will detail late fees etc. Doing this will help to ensure you get a card that suits you and your spending and repayment habits. While you're comparing credit card offers, be sure to find out if you can arrange to make your monthly payments by direct debit. Most credit card companies will be happy to oblige.