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If your Karat Card statement balance remains unpaid for one month after the due date, a 2% monthly Late Payment Fee will be assessed on the unpaid balance. This fee was previously called the Deferred Payment Fee. If you pay your statement balance in full and on time each month, this fee will not apply to you.

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How the Late Payment Fee works

If your full statement balance is not paid by the due date and remains unpaid when the next statement period begins, a 2% fee is assessed on your overdue principal balance. The fee is calculated as 2% of the remaining unpaid principal balance and does not include previously charged fees. Late Payment Fees do not compound and are always calculated only on the outstanding principal balance.

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Payment application

If you owe both an overdue principal balance and Late Payment Fees, payments are applied to the overdue principal balance first, then to any Late Payment Fees. Partial payments do not prevent a Late Payment Fee. To avoid the fee, your full statement balance must be paid by the due date.

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Credit impact

The Late Payment Fee itself does not directly affect your credit. However, late or missed payments may be reported to credit bureaus and could impact your credit score. Karat is a fintech company, not an FDIC-insured bank. Banking and Card services provided by Grasshopper Bank, N.A., First Internet Bank of Indiana, and Cross River Bank, Members FDIC.