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If your Karat Card statement balance remains unpaid for one month after the due date, a 2% monthly Deferred Payment Fee will be assessed on the unpaid balance. 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 Deferred 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. Deferred 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 Deferred Payment Fees, payments are applied to the overdue principal balance first, then to any Deferred Payment Fees. Partial payments do not prevent a Deferred Payment Fee. To avoid the fee, your full statement balance must be paid by the due date.

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Credit impact

The Deferred 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 financial technology company, not a bank. Banking services provided by Grasshopper Bank, N.A., Member FDIC. The Karat Visa® Business Credit Card is issued by Cross River Bank, Member FDIC, and pursuant to a license from Visa️ USA.