Late payment charges

Hi there…

In the last article, we have discussed 3 tips to select the best credit card for your success. In this article, we are going to discuss 2 easy steps to avoid late payment charges(LPC), over-limit charges, and other penalties.

People might have an opinion that the credit card is not helpful for the credit card users moreover it leads to diminishing the financial status of the customers. But I emphasize that the “opinion is not at all correct”, however, if the people know about the credit card and know about how to use it, then the consequences are more beneficial for the credit card users.

Late payment charges are extra charges for paying outstanding amounts out of the “interest-free credit period”. These charges are like penalty charges which cause-effect to the CIBIL(Credit Information Bureau of India Limited) score of the customer.

Moreover, LPC charges give the customer overburden and make lost of control on monthly payment aginst outstanding due.

credit card late payment charges

2 Easy steps to avoid late payment charges


Pay your outstanding amount reflects against your monthly billing statement within the “Interest-Free Credit Period”


Pay your MAD(Minimum Amount Due) i.e 5% against your TAD(Total Amount Due)

What are the late payment charges(LPC)?

Ans: Late payment charges are excess amounts collect by the credit card company when a customer not paying the bill cycle amount within the time given by the credit card company. We generally know about ROI(Rate Of Interest) taking by the credit card company when a customer does not pay the outstanding amount within the time given to the customer to pay.

What is the difference between ROI and late payment charges?

ROI is an interest amount collect on the outstanding amount when a customer does not pay within the bill cycle period, whereas LPC referees, an excess amount to collect in addition to the ROI.

For example:

Most of the corporate banks in the market collect ROI 3.35% pm

Late Payment Charges charged in addition to the ROI(Rate Of Interest)

Late Payment Charges(Important)

“For instance, SBI Card late payment charges given here as, If the customer outstanding due is 0-200, then the customer will not be charged any LPT, similarly, if the outstanding amount is >200 to 500, the customer will be charged 100, >500 to 1000 charges are 400, >1000 to 10000 charges are 600, >10000 to 25000 charges are 800, >25K and the charges are 950 maximum”.

What are the over-limit charges?

Over limit charges are, if the customer uses the card beyond his credit limit, then the customer will be charged with over-limit charges. The amount being charges depends on the banks of the credit card.

What will happen if the over-limit charges paid by the customer?

It gives the impression to the credit card company, that the customer spending cash more than the credit limit and charged with over-limit charges. Thes over-limit charges harm the customer’s CIBIL score coming down and which effects future profits of the customers.


As your advisor, I suggest you pay the credit card bill amount within the due date. In credit card terminology its called “Interest-Free Credit Period”. If you unable to pay within the due period here is the option pay the amount MAD(Minimum Amount Due) i.e just 5% of your total outstanding bill amount. If you can pay at least MAD against your TAD(Total Outstanding Amount), then “you will not be charged”  with LPC(Late Payment Charges) which helps not to affect your CIBIL Score or your credit history.

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