Monday, August 25, 2008

Big Mistake?

People make financial mistakes and they don’t want to admit them. It took me a long time to realize that. You’d think that living with my mistakes in the past would have made me own up to them. But no. It took a lot of thinking to even get to the point of admitting that I had made any mistakes.

So today I’m going short-circuit that self-delusional impulse, and admit that maybe I made a mistake a couple of months ago by financing my new driveway with a wire transfer from a credit card. Oh, not because we’re having trouble making the payments, or even making large enough payments to clear the balance before our 3% paid-in-advance fee period runs out. But because this month when I opened my bill I was absolutely horrified to see that the check we mailed on the 1st was credited on the 10th. Thus making our payment late. There was a late fee of $39, but more horrifying was the finance charge of $106.31 which was tacked onto the bill. By supposedly missing a payment due date, the terms of our loan had been breached and the credit card company could now charge us 11.74% as long as there was a balance outstanding.

Of course I called the company and had the late fee and the finance charge removed. And the CSR said she would send the case to another department to petition that the original terms be reinstated, so no more interest would accrue. She said that nine times out of ten, such petitions are approved.

So I should be relaxed now, right? But I’m not, because another bill we mailed the same day—actually, our mortgage payment—was credited the 6th, a full four days before the credit card company claimed to have received the payment. And so now I’m wondering if the credit card company is playing games. Has the company deliberately been ignoring opening its mail? Has it created labyrinthine processing structures just to trap the unwary? Hoping that most people won’t bother to call and protest? In recent years credit card companies have been shortening the number of days between when the bill is received and when it is due. I’m absolutely positive that this is a deliberate effort to entangle customers in late fees, as well as give the company an excuse to hike the finance charge rate. Are the companies now pretending that it takes the US Mail nine days to get a payment from West Virginia to Delaware?

There is legislation in Congress that attempts to set a generous 25 days for paying credit card bills. Maybe it’ll pass, but that might not solve the problem. After all, many credit card companies take up to 10 days after the monthly closing date on an account just to mail the bill. Another processing slowdown that in this electronic age I can’t help but think is deliberate.

Meanwhile, how do I feel about all this? Not so good. I’m seriously considering the online payment option if it turns out to be free. Or even an electronic check via the phone, which my state mandates must be a free service. But credit card companies play games with those, too. They’ll take the phone payment and credit the account a couple of days later, which makes no sense technically but lets them charge a couple more days’ interest on accounts that run a balance. I’m also thinking about just paying off the balance of this loan the next time one of my CDs comes up for renewal. Who needs this kind of roller coaster ride? Even though the plan was good on the face of it, living under it makes me uneasy. It’s beginning to engender that “I’m trapped” feeling that I lived with for so long when I had huge balances on all my credit cards and no way to pay them off. Been there, done that. Don’t want to go back.

So let me be an example to us all. We’ve had two months’ ride on this borrowed money at 3%, which was good. Now we probably will have that same rate for the next 11 months. But it’s not up to us anymore; it’s totally up to the credit card company. They have little incentive except to keep me as a customer. They’ll make a lot more money off me if they refuse to go back to the original agreement. That is, until I balance transfer the debt to another card with low terms, which I will do if I have to. But I hate to have my thoughts tangled up with these strategies. It’s a drag. My next CD renewal comes up in late October. Check back to learn if I go for paying off this debt so I can breathe freely again.

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