Late Credit Card Payment Lament
By: Jim | May 28, 2008 | Category: Money
Ever have a problem with a credit card? I just did. When I got my most recent statement, it showed that the previous month’s payment was late -- by one day! Unfortunately, I misplaced the bill in the mess I call a desk and got my payment in the mail a little late. Even though it was my fault my payment was late, I was still a bit ticked that the company charged me a late fee and had half a mind to cancel the card. Geez, I’ve paid off my balance in full and on time for nearly 20 years. Couldn’t they cut me just a little slack!?
After I was done being mad at myself for being late, I realized that canceling the card wouldn’t be good for my credit history
in the long run. The longer you hold on to your credit cards and make
payments on time, the better. The point being, you want to develop a
history of showing that you pay your bills on time. This shows lenders
that you are a responsible borrower and a good credit risk. Which means
you can get better interest rates on credit cards and loans. Many
people erroneously think that it helps improve their credit scores if
they cancel cards they’ve had for a long time and don’t use much or
need, this is not the case. Check out consumeraction.gov for more tips on how to manage your credit.
The late payment probably is a minor negative mark for my overall history, but I’ll worry about it all the same. Of course, I’ll be visiting the Federal Trade Commission’s annualcreditreport.com web site soon to get my free credit reports from the three credit reporting agencies. I’m hoping (probably in vain) that my report won’t get dinged.
There are a few other things I need to do while I’m at it. Like clean up my desk, so my bills don’t get misplaced. Better yet, I should just set up my accounts to that they can be paid by electronic funds transfer. Has anybody else out there had a problem with a credit card?
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But here's a question. What if you have a credit card that gets taken over by another bank? Then all of the sudden, your interest rate is higher; the rules / fine print from your old card don't apply to the new card.
Can anything be done?
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One thing consumers can do is comment on the Federal Reserve Board's proposed changes to regulations affecting credit cards. The agency is soliciting consumers' responses, so here's your chance to make your voice heard! To learn more and to comment, check out "the Fed's" press release at http://www.federalreserve.gov/newsevents/press/bcreg/20080502a.htm.
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In other words, if you have a card (i.e. credit) paying it off timely and in full and then do not use it for a time, your credit rating actually goes DOWN, not up or stay the same! Now, that seems counter-intuitive, if not abusive.
We are penalized, in effect, for maintaining good credit. Not having any recent record of paying on time is regarded as a negative credit signal, rather than a plus. I understand that corporations want/need us to spend money on credit (not a smart idea, by the way), but to then hold credit back from some people because they HAVE no other negative credit history is a form of stealth usury. It has the additional effect of driving people to spend themselves into debt even more, just to earn the right to have yet more credit!
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I have had a particular Credit Card (CC) (Bank of America Visa) since 1994 but don't use is as my primary card and now I remember why. They encourage electronic payments in their literature as most the CC's now do. I have made electronic online payments to them previously. In the 35+ years I have had credit cards, I have never been late for a payment.
They sent me a statment that had a due date of 5/18 (Sunday). On Saturday 5/17 I attempted to pay online, but it would not accept my payment with the date of 5/17 and automatically forced in the date of 5/19 which would make the payment past due. The following week I checked online and sure enough they had logged the payment past due and tacked on a late fee. I called customer service (CS) but they were not helpful...if fact they were rather rude. They refused to remove the late fee so I had them cancel the card. I also indicated I would not pay the late fee. If they try to blemish my credit record I will simply dispute it, but I am fortunate enough not to have to worry about a credit score anymore anyhow.
This seems like a deliberate attempt to force someone to be late with a payment. They said they couldn't accept the payment on a weekend because they only accept payment on business days. Frankly, I didn't know that computers took the weekend off...but wait, it wasn't off because it did accept my payment for the date of 5/19. If that truly is their policy, I think they should have to disclose it up front wherein they try to lure you into using electronic payments. Further, they should not post a due date on a non-business date if they don't intend to accept the payment on or before that date.
It makes me feel sorry for some of the folks who don't have as many options as me, and who may be forced into paying the late fee even though it was not their fault.
The old illegal practice of loan sharking pales in comparison to some of the currently legal practices of the credit card companies. The is an industry deeply in need of some extensive regulatory oversight in my opinion.
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