Credit cards are useful for getting cash back rebates and free air miles for your expenditure. They’re also needed for paying cashlessly in this day and age. But beware of late credit card payments.
If not managed, late payment fees and recurring interest on unpaid amounts can morph to an uncontrollable beast. Credit card debts can turn into a black hole, growing stronger and sucking more every day if you ignore your payments.
As a side note, why do banks charge you more money when you pay late? I mean, if you’re already paying late, what are the odds that additional fees will speed you up? That’s taking “flogging a dead horse” to a whole new level.
Anyway, that’s the reality when you have a credit card. Here are 5 ways to deal with late credit card payments.
1. Negotiate late credit card fees
A lot of people don’t bother to negotiate late fees. That’s a mistake.
Assuming you have a good credit record, most banks are happy to ignore occasional lateness. Just call the help-line, and say the following:
“Hi, I need to get my late fee waived.”
Regardless of what the operator says, follow up with:
“This is the first time in X years I’ve been late. I’ve been a good customer for a long time, and I’m sure you can overlook my mistake this once.”
Never end with a question when negotiating this. Always end by saying what you need the operator to do for you.
You also stand a good chance if it’s your first time using the card. Explain that you’re new to this credit card thing, and you don’t understand billing cycles. Banks usually let you off the first time.
2. Remember your billing cycle
Your credit card billing cycle will vary, depending on when the card was activated.
Knowing that you need to pay “at the end of the month” or “at the start of next month” isn’t sufficient. In order to avoid late payment, you have to know exactly when the last payment day is. And if that day falls on a non-banking day, e.g. public holiday or weekend, then the money needs to be in on the banking day before that.
It helps to put in the due date for each card in your calendar. If you use Google Calendar, if you can even indicate “recurring event” so that you get a reminder to pay before the due date every month.
Payments are faster with ibanking especially since they process instantly, but if you’re using the old-school AXS to make payment, factor in 48 hours for the machine to process payment.
3. Argue against raised interest rates
Think late fees are the worst that can happen? Not really.
When you miss the repayment date, there are also raised interest rates on your unpaid amount.
Be late even once, and your credit card interest rate might go from 24% to 28% APR, or even higher. So whenever you get late fees, be sure to check on the interest rate as well.
If the interest rate was raised, call the bank immediately. Request for them to reset the interest rate. They might just do you the favour.
4. Change the due date
So your pay comes on the 24th, but your due date is on the 22nd. By shifting the due date to the 26th, you might reduce the chances of a late payment.
Why not ask?
Not a lot of people know this, but you can request to shift your due date. There’s no guarantee your bank will co-operate, but try the following:
Before attempting this, make sure your credit card is fully paid. Then call the help-desk. If you ask nicely and pay your bills in full, they might just give it to you. If not, why not use another card?
5. Ask for grace period
Most cards have a grace period of three days. Sometimes it is in the terms and conditions, sometimes it’s not.
So when you miss the due date by a day, don’t give up on making the repayment thinking you’re late anyway.
If you can pay the minimum repayment $50 in the next few days, it’s still not late. Then, of course, ensure that you fully repay when you get sufficient cashflow to avoid exorbitant interest fees.
If all else fails, find forgiving cards
If your bank is going to get all Saddam-Hussein about your restrictions, look somewhere else. If your bank refuses to waive one late fee in 10 years, then it doesn’t deserve your loyalty.
How do you deal with late fees? Comment and let us know!
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Tags: Credit Cards