As you have probably taken notice, credit card late fees are on rise and have been so for awhile. There is enormous competitive pressure on credit-card interest rates and annual fees, and this has given way to a fee frenzy. For credit card issuers, late fees now represent their third largest revenue stream, (interest revenues and merchant fees rank first and second, respectively). In essence, those who pay late are now covering costs for those credit card users who do not carry a revolving balance and those who file for bankruptcy.

So how much are credit card companies making from issuing late fees? Over years we have watched number of late fees charged to consumers jump to record-high levels. Late fees can range from $10 to as much as $40. The average late fee more than doubled since 1996 from $13.28 to $29.84. In fact, many major card issuers are now charging a $35 late fee. Let’s assume that 100,000 people made late payments for a particular month and they were charged a late fee of $30 for doing so. This would add up to $3 million in revenue. As you can see, credit card companies are making a lot of money off of card holders and there is no slow down in sight regarding increase in late fees.

This phenomenon is accredited to ease of gaining credit during college years, when credit card offers are pouring in almost every semester we are enrolled. As students we are not yet aware of consequences of using credit unwisely, so we use them to pay all of expenses not covered by our tuition. Then after we graduate, we spend most of our time trying to find employment to repay all of those student loans we acquired, and often overlook small debts created by using credit cards we applied for to pay all our other expenses.

Now, all of our accounts have gone to collection, even ones we tried to pay but got behind on, collection agents are calling and we are doing our best to avoid their calls because with all of our other living expenses, we barely have enough for food. Eventually collection calls slow down or completely cease, and we think it over, but it has only began, a few years later when we go to apply for a car or a home, those neglected credit card accounts come back to haunt us.

This is a typical scenario faced by millions of consumers every day, but there is hope for those tying to repair damage done in our earlier, uninformed years. And answer rest in laws created by Federal Government, in a form of laws that protects consumer as-well-as helps them try to restore their "good credit" rating. These law are entitled Fair Credit Reporting Act, Fair Debt Collections Practice Act, and Fair Credit Billing Act, if used wisely these laws can in affect help consumers? restore their credit to a status they can be comfortable with, if not "perfect."