The late payment fee for credit cards is 5% of the unpaid minimum balance, with a minimum of RMB 10 or USD 1.

If you spend 15,000 yuan with your card this period, the minimum repayment amount for the current period is 1,500 yuan, and you only repay 500 yuan to the bank that month, then the bank will pay the part below the minimum repayment amount: 1,500 yuan - 500 yuan = 1,000 yuan for late payment fees. The amount of late payment fees is: 1,000 yuan * 5%, which is 50 yuan.

It should be noted that late payment fees are never charged separately, and penalty interest is also charged for late payment fees.

The daily interest rate of credit card overdue penalty interest is 0.05%. The interest of the current month is included in the principal of the next month, and the late payment fee is calculated together; that is to say, one billing cycle is the calculation period for interest and late payment fees. If there is no interest in the next cycle, If it is paid off, the interest and late payment fees will be merged into the principal and recalculated. In this way, profits will compound and accumulate more and more.

Extended information:

In the "Notice on Matters Related to Credit Card Business" issued by the People's Bank of China from January 1, 2018, there are 6 businesses that have made important reforms compared with the past regulations. item.

Among these six items, there are advantages and disadvantages, good and bad.

The first one is to change the late payment penalty into liquidated damages. This is undoubtedly a significant benefit to credit card holders.

The previous late payment fee standard was: if the cardholder has not paid the minimum payment, or has not paid the full amount, as long as it is not within the time tolerance. You will need to pay high overdue fees and interest.

The fee calculation method is calculated from the transaction date, with a daily handling fee of RMB 50,000, compounded with interest, until it is paid off. Just like the legendary snowball, it keeps getting bigger and bigger. The longer you owe, the bigger the number will be.

In previous reports, there are many examples of credit card late payment fees, ranging from a few yuan in arrears to 7,000 to 8,000 yuan in late payment fees after one year of arrears. These examples are enough to prove that late payment fees with compound interest are harmful and innocent to many credit card holders. Many cardholders express their ignorance and helplessness about this method of compound interest.

After all, the bank acted in accordance with the regulations and did not violate the law. However, many people did not read the regulations when applying for credit cards, or did not understand them. I was puzzled by the huge interest incurred due to overdue payment.

In the 2018 new credit card regulations, collection fees are changed to liquidated damages, which will be charged once and interest will not be calculated twice. Doing so will not create compound interest. The interests of cardholders are greatly protected.

Although the new regulation changes late payment fees to liquidated damages, cardholders are still best to repay on time and avoid overdue payments. Maintaining a good credit report is the right way to go.

Baidu Encyclopedia - Credit Card Late Payment Fees

Baidu Encyclopedia - Liquidated Damages