Filed under: Saving
It was all my fault, and I felt awful about it. Worse yet, I was stuck with it, unless I got a break.
I'm talking about a $25 late payment penalty fee on a department store credit card that I opened within the last few months. As so many people have, I signed up for the card at the checkout counter, largely for the discount, and didn't really concern myself with the interest rate. But I would pay it all off in a big hurry, so I didn't have much to worry about -- or so I thought.
I used the card several times in a fairly short period to save a little bit extra on some clothes I needed to buy, and I quickly paid all but a small portion of my balance off quickly. But as weeks passed following those shopping trips, I basically forgot about the card. Out of sight, out of mind -- at least until that second bill arrived.
Angry at myself over my mistake, I didn't beat myself up. I took action.
Here's what I did:
1. I paid the bill ... The next day, I paid the bill through my bank's website. I knew it would take a few days to process and for the money to actually get to the credit card issuer, but that was OK. Since I acted quickly, I knew I wasn't in any danger of ending up 30 days past due, getting a black mark on my credit report and slashing my strong credit score. (If you are nearing that 30 days past-due threshold, don't rely on online banking. Call your bank and arrange something that ensures the bank gets paid more quickly.)
2. ... but not all of the bill. I pay my credit cards off each month, typically. I've been deep, deep in credit card debt and have no intent of ever returning to that point. However, in this case, paying the entire statement balance would have been a tactical error. Instead, I paid the balance minus $25 -- the amount of the late payment fee, which I hoped would eventually be waived by the credit card issuer.
3. I set up electronic billing and auto pay through my bank. I made this move for the card issuer's peace of mind -- or algorithm. My bank allows me to receive electronic bills through the bank's website and then pay them in full automatically each month. It seemed like a win-win for me and the bank. My thought was that if, when speaking with the issuer about waiving my late payment fee, I could tell the company that I've made these arrangements to ensure I'll never be late again, that might help my case. Of course, the issuer would have no way of knowing if I really had done it or if I was just saying I had, but even so, it felt like a worthwhile good-faith gesture to make.
4. I called and made my pitch. "Hi, my name's Matt Schulz. I was late with a payment recently. However, I just paid my bill online -- and even set up electronic billing and auto pay so it won't happen again -- and I'd like to see if you could waive my late payment fee." I was nervous about asking, since I don't have a terribly long track record with this card, but I asked anyway. The customer service representative said she needed to speak with her manager and proceeded to put me on hold. As I waited, I considered what I would do if my request was rejected, possibly going as far as threatening to close my card. But that became a moot point. A few nervous minutes later, she told me that the bank would grant my request, but only this once. Mission accomplished.
Of course, it probably helped that I have very strong credit overall, even if my history with this particular card is short. The better your track record with the credit card issuer, the more likely it is to cut you some slack when you mess up.
Still, the fact is that you don't have to have a perfect credit score to get a fee waived. Some credit cards -- like the Discover it card -- include a policy that allows a cardholder's first late-payment fee to be waived. But typically you do have to ask, and sometimes if you do, you might just find that you've saved yourself $25 for your efforts.
Matt Schulz is the senior industry analyst at CreditCards.com, a site dedicated to helping people make smart decisions about obtaining and using credit. You can follow him on Twitter at @matthewschulz.
