It is legal to charge penalty fees for overdue credit cards.

The bank’s credit card interest rates and liquidated damages are all legal and compliant, and the legal usury interest rates are also based on bank interest rates. Liquidated damages refer to one party’s payment according to the agreement of the parties or direct provisions of the law. The amount of money payable to the other party if one party breaches the contract. The standard for liquidated damages is money, but the parties may also agree that the subject matter of liquidated damages is property other than money. Liquidated damages have the effect of guaranteeing the performance of debts, and also have the effect of punishing the defaulter and compensating the losses suffered by the party without fault. Therefore, some countries use it as one of the measures to guarantee the contract, and some countries use it as a liability for breach of contract. way of bearing responsibility. When a party completely fails to perform or improperly performs its debt, it must pay the other party a certain amount of money or other property other than money as agreed. Liquidated damages are a form of contract economics and an economic sanction for breach of contract. Liquidated damages are established to ensure the performance of debts. Even if the other party does not suffer any property losses, liquidated damages must be paid in accordance with the provisions of the law or contract. The standard of liquidated damages shall be determined by law or agreed in writing by both parties in the contract.

The consequences of an overdue credit card:

1. The borrower needs to bear the liability for breach of contract if the credit card is not repaid, usually high penalty interest and liquidated damages;

2 , Suffering from collection by banking institutions;

3. If the credit card is overdue for 90 days, you may also be sued by the banking institution.

To sum up, credit card default penalties affect your credit report. The bank will charge liquidated damages only if the credit card payment is overdue.

Legal basis:

Article 577 of the "People's Republic of China and Civil Code"

One party fails to perform its contractual obligations or performs its contractual obligations If it fails to comply with the agreement, it shall bear the liability for breach of contract such as continuing to perform, taking remedial measures or compensating for losses.

Article 582

If the performance does not comply with the agreement, the parties shall bear liability for breach of contract in accordance with the agreement. If there is no agreement on the liability for breach of contract or the agreement is unclear, and it cannot be determined in accordance with the provisions of Article 510 of this Law, the injured party may reasonably choose to request the other party to bear the responsibility for repair, rework, or replacement based on the nature of the subject matter and the magnitude of the loss. Liabilities for breach of contract such as returns, reduction of price or remuneration, etc.