State law may apply or may not you don't give any facts as to where the parties are etc. the note controls the terms if they are unclear then the judge interprets against the drafter of the note or tries to figure intent of the note. Terms of the note also control whether the collection fee must be paid. Also a contract or agreement you signed with the creditor controls a lot of these issues. No one can guess at it without reading it.
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The terms of the Note control. If the rate stated is too high the note might be void under usury laws. There is no requirement for a grace period, so if a payment is not made on the due date ithe late fee would apply. You should have an attorney review the note. No offense, but just saying the terms seem vague does not mean that they are not going to be enforceable. However, if they are ambiguous the terms will be construed against the drafter of the note.
The fact that the principal has been fully repaid may give you some room to negotiate about reinstating the account, but it is not clear if you must pay the collection fee. It will require a closer look at the note. Also, if no collection fee was actually paid by the creditor tey may not be entitked to collect any amount for that from you. Again, the note is very important.
Finally, you may not be able to get all the facts from the note maker without a lawsuit.