While no issuer would ever admit doing such a thing, card companies' billing practices have come under fire in 2000. Both Citibank and Chase Manhattan have settled consumer class action lawsuits over payment processing practices in the past few months. In fact, lots of card customers are plenty angry about what they consider unfair billing practices. A payment sent in two weeks early is billed as late. Payment due dates fall on Sundays or federal holidays.
Some issuers have early morning cut-off times for processing payments as well.
Say an issuer has a cut-off time of 9 a.m. It's clear that penalty fees are big moneymakers for issuers. Ninety percent of those penalty fees were from late payments. Some folks get slapped with sky-high penalty interest rates as well. A start, but only that With so much hoopla and hostility over charges and fees, penalty-free cards are a welcome change.