Credit Card Crazed?
What is it with credit cards? In the olden days (maybe a couple years back), you'd get a bill and had nearly 30 days to pay it. Now, those days are shrinking and shrinking - and shrinking.
Suppose I had gone to the Inauguration. Suppose I had left on Friday in order to spend time with old friends in DC. Suppose I did not get back will Wednesday, the 21st. There, waiting for me, would have been 2 bills that arrived on Friday. One due on the 28th - telling me to be sure and mail my payment a week ahead. Too late for that!. One due Feb 1st - 3 extra days for a bill that luckily I can pay right at my own bank.
It seems these companies are deliberately delaying sending a bill. (And this is happening more and more!) Sending it in such a way that people have only a few days to write that check and get it in the mail.
Why would they do that?
Call me paranoid, but I think they're after the "late payment" fee. Either that or they are lying in wait for the poor soul who wants to pay in full, but may not have the full amount till next week. So if the credit card company is really lucky, maybe they can charge not only a late fee but a nice fat interest fee too. (Interest rates, I notice, have also gone through the roof!)
Now, of course you might know a different explanation. Something innocent perhaps. If so, please clue me in.
Otherwise, I'm hoping that this seemingly small but extremely burdensome policy will receive attention from the Congress. With so many hard-pressed to pay their bills, at least the bills should arrive in plenty of time to pay them!
Or at the very least, I should be able to assess a late fee for a late bill!
Suppose I had gone to the Inauguration. Suppose I had left on Friday in order to spend time with old friends in DC. Suppose I did not get back will Wednesday, the 21st. There, waiting for me, would have been 2 bills that arrived on Friday. One due on the 28th - telling me to be sure and mail my payment a week ahead. Too late for that!. One due Feb 1st - 3 extra days for a bill that luckily I can pay right at my own bank.
It seems these companies are deliberately delaying sending a bill. (And this is happening more and more!) Sending it in such a way that people have only a few days to write that check and get it in the mail.
Why would they do that?
Call me paranoid, but I think they're after the "late payment" fee. Either that or they are lying in wait for the poor soul who wants to pay in full, but may not have the full amount till next week. So if the credit card company is really lucky, maybe they can charge not only a late fee but a nice fat interest fee too. (Interest rates, I notice, have also gone through the roof!)
Now, of course you might know a different explanation. Something innocent perhaps. If so, please clue me in.
Otherwise, I'm hoping that this seemingly small but extremely burdensome policy will receive attention from the Congress. With so many hard-pressed to pay their bills, at least the bills should arrive in plenty of time to pay them!
Or at the very least, I should be able to assess a late fee for a late bill!
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You just noticed that, eh? It's been going on for some time now. Indeed there used to be a 10 days grace period, I'm not quite sure when they did away with that.
Of course they do it to get fees, which themselves have gone through the roof.
Have you ever wondered why banks can hold a deposit for 24 hours, or over the weekend, but any debits are taken out fairly instantaneously? Last I heard Congress was "looking into" bank fees. But, that was a while ago. I guess Congress decided usury was fine as long as they got a percentage.
January 18, 2009 11:43 AM | Reply | Permalink
Yes, you point out another difference - that corporations seem to get more breaks than citizens.
Honestly, when this first began happening, it made me kind of panicky.. that there was so little time to get the payment in. Earlier this month, one creditor we use all the time, changed the timing of bills - indeed I feared the bill had been lost and phoned them - only to find that they now employ GE Capital to do their billing... and maybe get the late fee, who knows? The bill had been sent and arrived the very next day. (It was especially annoying as I was trying to get all ducks in a row before that surgery happened.) Just one more nuisance at a time I didn't need it!
January 18, 2009 11:48 AM | Reply | Permalink
I wish I could send you links, but I have read many articles concerning the conspiracy out there to amass late fees on top of higher interest rates by the credit industry. Congress has to act on this.
You know, they were bundling this type of debt also and w along with the Congress passed the single worst Bankruptcy Act in the history of this country taking away the option of bankruptcy from most consumers. And Bankruptcy is a right listed in the original Constitution.
Now don't get me wrong, when this country was first established, there were still debtor's prisons, which I do not believe is known by a large majority of our citizens. But, as I said, bankruptcy is a right.
One of the things credit companies do is put their mail in a holding bin so that they age like fine wine.
In our State, it is assumed by law that the recipient of a letter has received that letter within three days of posting.
And for some purposes, in some states, payment is made on the date the payment is posted.
At any rate, we desperately need new laws on this subject on the Federal level.
January 18, 2009 12:00 PM | Reply | Permalink
Finally the truth emerges!
January 18, 2009 12:03 PM | Reply | Permalink
meant, of course, for dd above.
January 18, 2009 12:04 PM | Reply | Permalink
See http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/feds-ban-unfair-credit-card-rules.aspx for a description of new rules to take effect July 2010.
Among the rules is one prohibiting "Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay."
July 2010 seems like an unreasonable time to wait for these reforms.
January 18, 2009 12:35 PM | Reply | Permalink
Thank you, Merrill! Yes, why should the consumer wait for redress, when the creditor does not wait for punishment?
January 18, 2009 12:41 PM | Reply | Permalink
Good for you. And I am glad that new rules are coming. Just not soon enough.
We give the usurers two years and the usurers give the consumer two days.
Thanks Merrill
January 18, 2009 12:54 PM | Reply | Permalink
Yes, but 21 days from when. Statement close date doesn't work if you don't get the bill until 10 days later. Mailing date, then they better mandate that all mailing must include a dated postmark.
Receipt date, how do you prove when you got it?
January 21, 2009 6:06 PM | Reply | Permalink
Ohhh....they're out their raping the small businesses through arcane purposefully inconvenient end of day closing procedures with a myriad penalties and other gotchas. This is over and above the 2% to 3% of sales they charge for the privilege. Also, if you return an item and get a credit card refund the credit card companies do not credit your account until after the next billing cycle so they can use that money interest free while charging you late fees on it if you didn't pay on time.
I grew up thinking loans at a 25%, 30%, 35% and more was loan sharking and illegal.
Revolt - boycott them; use cash!
January 18, 2009 2:27 PM | Reply | Permalink
Cash. We use it as much as possible! I agree.
January 18, 2009 3:43 PM | Reply | Permalink
I'm one of those relative raries that was able to cut up my credit cards in 2002. (The price I paid, alas, was the life of my 80 year old mother.) My house is paid for, as are my "new" (1991) and old (1985) cars. My income is meager, but my needs are simple.
I have Visa-affiliated debit cards that I use for 95% of my financial transactions and rarely have more than $20.00 cash in my wallet. It took about two years to get used to my adopted "If you can't afford it, you can't have it" philosophy, but I'm comfortable with it now.
I have enormous empathy for those who don't have that option. I'm single now and my daughter is succeeding in her ceramics business. I'm not in a position of being forced to use credit cards to pay for food, clothing and other essentials of life.
People who have to use one credit card to pay off another credit card debt, however, need to seek advice from one of the many credit assistance (many non-profit or non-fee) agencies available to them. I'm pointing fingers and saying these folks were trying to create something out of nothing--they're victims who got sucked into the Easy Credit Vortex and need help. It's tough, but, like quitting smoking (been there, done that), it's possible
January 18, 2009 11:27 PM | Reply | Permalink
OOPS! I'm NOT pointing fingers. Proofread, proofread proofread!
January 19, 2009 12:28 AM | Reply | Permalink
We use credit cards almost exclusively. We rarely use debit cards, because they do not afford the protections that a credit card does (can't beef the charge if you don't like the product like you can w/ a credit card.) We have our Visas through our credit union and an American Express through Costco. We get a 1% cash rebate at the end of the year on them all. We track our purchases so we don't over spend and pay the cards off in full every month, so NEVER pay interest. Most credit card companies allow you to pay your bill on line now, and some even allow you to set up your payment in advance, so you can tell them as soon as your statement cuts how much to take from your checking account and the date you want them to do it. American Express even lets us know by e-mail that our statement has cut. Since I have switched to paying on line, I have never had a late payment and that's been years.
This info doesn't address your concerns about the policies of the credit card companies, but may offer some help in "work-arounds."
January 19, 2009 1:10 AM | Reply | Permalink
You're not paranoid at all. The credit card companies do this for three reasons: the late fee is highly profitable, getting paid faster means better cash flow, and making paper statements less convenient drives people online which reduces the cost of the billing process greatly. I don't have a problem with their third reason because it has environmental benefits too, but the first two are predatory. Congress should pass a law requiring all creditors to postmark their bills (so the mailing date is known) and give people at least 30 days from the postmarked date of the bill to mail their check back, with no late fees or interest charged unless the check is received more than 45 days from the postmarked date of the bill.
January 19, 2009 8:08 AM | Reply | Permalink
Thanks, Purple State. I'm not sure how they're getting money faster, though, if they bill late. The bills only come once a month, but are just printed out and sent late - so far as I can tell. But your 3 reasons make sense, including that they want people to bank over the web. (or perhaps give them a right to automatically take the money straight out of your account? horrible thought that!)
January 19, 2009 9:55 AM | Reply | Permalink
TheraP, it's the short payment period (21 days) that speeds up cash flow. They measure the 21 days from the statement close date, not the mailing date. Delaying mailing increases the chance that people will miss the 21-day deadline, but also increases the likelihood of the company receiving a late fee. The ideal situation for the credit card company would be to get your payment a day or two late. It doesn't affect their cash flow much, but it allows them to charge the late fee. I'm sure they've calculated the timing precisely to ensure they maximize their take.
January 19, 2009 1:35 PM | Reply | Permalink