If you think credit card interest rates are high, then you should take a moment to calculate the effective interest rate of a late fee. Federal law caps late fees at $27 for the first late payment and forbids these fees from exceeding the amount of the minimum payment. But if you were assessed a late fee of $27 for paying a $27 bill a day late, it would be the equivalent of paying 36,500% interest on $27 for one day!
While this is an extreme example, late fees can still be very costly, especially when combined with the higher penalty annual percentage rates (APRs) that many credit cards impose after you miss a payment. Thankfully, there are some credit cards that will waive some, or all, of your late fees. But even if you have one these cards, interest will still be calculated based on your average daily balance, so you should still strive to make your payments on-time in order to reduce your interest costs.
Remember, too, it’s important to read the fine print of any credit card you are considering to be sure it’s right for you. It’s also a good idea to check your credit, since a good score will help your qualify for the better plastic out there. (You can view two of your credit scores, updated every 14 days, for free on Credit.com.)
With that in mind, here are three credit cards with no fees for paying late.
1. Citi Simplicity
Besides having no late fees, this card features an outstanding promotional financing offer. New accounts receive 21 months of interest-free financing on both new purchases and balance transfers, with a 3% balance transfer fee. Following the promotional financing period, cardholders will receive a standard interest rate of 13.24% to 23.24%, depending on their creditworthiness when they apply. Also, this card has no penalty interest rate. (Full Disclosure: Citibank, PenFed and Discover advertise on Credit.com, but that results in no preferential editorial treatment.)
Other benefits include Citi’s Price Rewind service, which will automatically refund a price difference when an eligible item is advertised for less within 60 days of purchase. This policy has a limit of $500 per item and an annual maximum of $2,500 per year. Cardholders also receive extended warranty coverage, worldwide rental car insurance, and travel and emergency assistance. There is no annual fee for this card.
2. PenFed Promise
If you really hate paying credit card fees, this could be the card for you. This card does away with not just the late payment fees but with all other credit card fees including annual fees, foreign transaction fees and cash advance fees. And although this isn’t a rewards card, new applicants can receive a $100 bonus statement credit after spending $1,500 within 3 months of account opening. New accounts also have a low balance transfer APR of just 4.99% for the first 12 months, with no balance transfer fee. Afterwards, the standard interest rate for new purchases and cash advances will be 9.49% to 17.99% based on your creditworthiness.
Finally, keep in mind that PenFed is the Pentagon Federal Credit Credit Union, which was created to provide financial services to members of military, government and defense organizations, as well as their families. Membership is also available to those who join a military support charity for a small, one-time fee. There is no annual fee for this card.
3. Discover it
The Discover it card offers an automatic waiver of a cardholder’s first late payment fee, and unlike most cards, it doesn’t have a penalty APR. The standard Discover it card offers 5% cash back on up to $1,500 spent each quarter on select categories of purchases, and 1% cash back on all other purchases. Rewards can be redeemed at any time and for any amount as cash back, statement credits, gift cards or merchandise.
This card offers 12 months of 0% APR financing on both new purchases and balance transfers, with a 3% balance transfer fee. Afterwards, the standard interest rate will apply which is 11.24% to 23.24%, depending on your creditworthiness when you applied. There is no annual fee for this card, and no foreign transaction fees.
At publishing time, the Citi Simplicity, PenFed Promise and Discover it cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.