Late payment fees are charges imposed on individuals or businesses when they fail to make timely payments for products or services.

These fees act as penalties for not meeting payment deadlines and can range from a flat rate fee to a percentage of the outstanding balance.

They are commonly seen in credit card bills, utility bills, and loan repayments. Late payment fees serve as a way for companies to recoup any losses incurred due to delayed payments, such as administrative costs and potential losses in interest.

While these fees may seem like an inconvenience, they also act as an incentive for individuals to make payments on time and avoid accumulating debt. Additionally, late payment fees help companies maintain their cash flow and ensure that they are paid for the products or services they provide.