From Sharon O'Brien,
Your Guide to Senior Living.
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If you think that using your credit card is costing you more lately, you’re probably right.

The fees that credit card companies charge when you pay your bill past the due date have nearly tripled between 1994 and 2004, according to Money magazine.

During those same years, credit card company revenues declined due to competition and financial markets that favored consumers, which forced many companies to lower their interest rates.

To compensate, credit card companies found creative ways to increase other charges.

Among the worst are late fees, because in addition to the charge itself:

• You could end up with a punitive increase in your interest rate.
• You could receive a demerit on your credit report that may affect your other accounts.

Late Fees Are Going Up
Many credit card companies now use a tiered penalty system that is based on your monthly balance, so the more you owe, the bigger the penalty if your payment is late.

In 1994, the average late fee was $12.55. By 2004, the average credit card late fee had risen to $32.65.

And on top of that, the company may exact further punishment by jacking up your interest rate as high as 41 percent.

”Universal Default”
Sometimes hidden in the fine print of your credit-card agreement is a feature called “universal default,” which allows your credit card company to raise your interest rate even if you pay your bill on time.

Here’s how universal default works: If you are late with a payment to any creditor, other creditors whose agreements with you include a “universal default” clause can increase your interest rate even if your record with them is perfect.

Shrinking Grace Periods
Meanwhile, the credit card companies have made it harder for you to avoid making late payments by steadily reducing the length of traditional grace periods. In 1994, the average grace period for credit card bills was 27 days. By 2004, that figure had shrunk to 20 days.

NOTE: Want to know how you can avoid paying late fees and other interest charges on your credit card? Read 6 Tips to Avoid Credit-Card Late Fees.