Late fees are charges that a company or organization imposes when a payment is not made by the due date. These fees are common in various situations, such as credit card bills, utility payments, and rental agreements. The purpose of late fees is to encourage timely payments and compensate the lender or service provider for the inconvenience caused by the delay. The amount of a late fee can vary depending on the terms set by the creditor or service provider. Some may charge a flat fee, while others might impose a percentage of the overdue amount. Understanding the terms of late fees can help individuals avoid unnecessary costs.