ASK SINDIE: Your money problems solved - Disputed penalty on the plastic

Last August, MBNA offered me an interest-free credit card deal until May this year. I signed and began making the pounds 5 minimum monthly payments by cheque.

But in November, my account was debited with a "late fee" of pounds 25, plus interest.

Writing to explain that I had posted the cheque well ahead of the due date, I was refunded half the late fee. But I then discovered that the interest-free period had been cancelled and replaced with a monthly interest rate of 1.45 per cent.

I complained once more and MBNA agreed to switch me back to the 0 per cent deal - subject to my payment of January's statement, which had been charged at the new, higher rate. After doing so, I complained to the company - again - and it offered to credit my account with pounds 50.

This was still unacceptable and I asked MBNA to review my case. At last, January's higher payment was credited back to me.

This has taken a lot of time, worry and effort to rectify; are there any steps I can take to stop this problem happening again? And will the missing November payment impair my credit history?

JL, South Glamorgan

Many people are unaware of the late payment fines and charges levied by their credit card companies - until they miss a payment and find themselves faced with a hefty bill they hadn't budgeted for.

Even if you owe as little as pounds 5 and pay it as little as a day late, you could incur a penalty fee of around pounds 20 to pounds 25, plus interest on top.

MBNA says its charges for late bill payment - a fee if the money does not reach the account within one day of the due date, and a switch away from the introductory rate - are clearly laid out in its terms and conditions.

Your original cheque was never received, says MBNA spokesman Paul Lawler, but he insists the company did all it could to rectify the problem and pay the money back into your account once you had raised the issue.

Lenders levy the fee to cover the cost of collecting card debts. But Mike Naylor of consumer group Which? says such charges are "way above" the actual costs incurred. Moreover, the charges are the same whether you're a day or a month late. The fees are already being investigated by the Office of Fair Trading.

While your one-off late payment should not affect your credit reference, a catalogue of slip-ups could cost you dear when applying for credit in the future.

Make sure you send your money by cheque in the post at least seven working days before the payment due date - and note these dates down.

However, given that the British postal system can be unreliable, a better way to avoid late payment is to set up a direct debit. Not all credit card companies allow you to arrange one automatically when you take out a new card. Instead, you have to call the lender to set up the debit.

You may prefer to send cheques by post as you have always done - but, as long as you have enough funds in your current account, a direct debit will mean you won't have to worry about being overcharged. With some expenses, such as energy bills, it can even save you money.

For more information go to www.directdebit.co.uk

If you need help from our consumer champion, write to Sindie at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email sindie@ independent.co.uk. We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.