CREDIT CARD LATE FEES RISING

Card Wire

January 7, 2004

New credit card offers are including higher late fees, some up to $39, a spokesperson for Tarrytown, NY-based Synovate Mail Monitor tells CardLine today. In the third quarter, 10% of the estimated 975.7 million credit card solicitations issuers mailed had late fees of $39, according to Synovate. This is the first time Synovate has seen fees that high, the spokesperson says. Overall, the average late fee edged up in the quarter to $33.22 from $31.26 in the second quarter. Synovate would not identify which issuers are charging particular late fees, but a CardLine survey of recent solicitations mailed by major issuers shows MBNA Corp. to be the only one charging a maximum of $39. MBNA, like most of its large cohorts, typically has tiered late fees with higher overdue balances garnering a higher fee. A solicitation reviewed by CardLine shows the $39 fee kicks in on balances of more than $1,000. MBNA did not return a CardLine request for comment. The other issuers' recent offers had maximum late fees of $34 or $35. The trend toward tiered late fees began in November 2002 when Citibank and Chase implemented the new structure within days of each other, says Scott Strumello, an analyst at Westbury NY-based consulting firm Auriemma Consulting Group. Bank One and Fleet were quick to follow suit.

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