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You’ve heard it time and time again from me: credit cards are not evil. I have admitted that the credit card companies do not necessarily have your best interest in mind. That’s fine with me, they are out for profit. Yet they have set the playing field up in a way that you can easily profit from safe credit card use.
Many of come to this blog and said “But what about the interest? The excessive fees?”. I have always brushed those aside because I wouldn’t be caught dead paying fees.
The Ramsey fans should love this.
My day of reckoning has come.
Actual it came a few months ago, but I’m just getting to write about it. Here’s what happened.
I charge everything I possibly can to our American Express Blue Cash card. This past year I earned $470 in cash back rewards. The year before that was $432 in cash back. Essentially free money for paying for things we would have purchased on a debit card or with cash. The AMEX Blue Cash card also has no annual fee, so really it is free money if you avoid finance charges or any fees.
I don’t send paper checks to pay my bill. I pay it online. A few months ago I set up a payment for the statement balance just like I had every other month. Except this time I apparently used our brick-and-mortar bank that we keep a very low balance in rather than our online checking account.
As you might imagine, it got fairly ugly fairly quickly. AMEX pulled the money out of the bank account, the bank charged me a non-sufficient funds (NSF) fee of $38. AMEX then “returned” the money to get the bank account back into the black — because it was never there in the first place. AMEX then went ahead and charged me something like $65 or $68 in late/finance fees based on the balance I was carrying.
My blood pressure went up a bit that day. I had the money — just in my online checking account. I quickly deleted the old brick-and-mortar connection with AMEX, and setup the payment with the online account.
All seemed well, I just had some fees to deal with. That is until AMEX then pulled the money out of the brick-and-mortar again even though I had the other payment already steup. Apparently if they try to take a payment from you and it fails, they can try an additional two or three times to see if they get payment.
I understand that policy… but I had just setup payment from the other account. I was highly irritated at this point to say the least.
The end result: over $100 in finance charges and bank fees. A huge mess. A bank account in the red. Granted, not on our primary account, but still. I’m the personal finance guy. This looks bad.
What the heck am I going to do and why am I talking about it? Wouldn’t it be better to sweep this under the rug and not tell my readers?
Nah. I think we can all learn from this.
Find out Monday on how I cleaned up the mess. (Subscribe to the RSS feed if you think you might forget to come back.)
19 Comments, Comment or Ping
JB
Thanks for sharing. Yes we can all learn from that… I’ve done something similar… make sure you choose the right account when you’re transferring over to ING too!
Aug 29th, 2008
Eden
I appreciate you sharing the bad side of the credit card game as well as the good. Like you said, we’ve all had our financial Days of Reckoning.
I’m curious what you think about AmEx now. I’ve heard some really awful things about them in addition to this story. Are you going to look for a different cash back card?
Aug 29th, 2008
Kevin
@JB: I’ve done that man with ING — accidentally transfer from (or worse, TO) ING from the bank account. “Stop stop stop!”
@Eden: I promise my readers I’m going to be ‘real’ with them. No rose colored glasses here. As to what I’ll do, I guess you’ll have to wait until Monday
Aug 29th, 2008
LAL
Call and ask to remove the fee because you are a great customer. They do it all the time.
I’ll write about it later.
Aug 29th, 2008
Bruce
Great lead to Monday, very cool.
As for the problem, Monday? That is a holiday isn’t it?
Aug 29th, 2008
Penelope Pince
I read a post by another finance blogger a few months ago, it might have been Blueprint for Financial Prosperity or Consumerism Commentary (can’t remember or find it), where a similar thing happened. He just slipped up once and forgot to pay his credit card bill. He called the CC company and explained the situation, and because he had never been late paying before, they removed the fees. It’s worth a try. $100 is a lot of money.
A similar thing happened to us once when we were moving from Hawaii to California. Our bank manager in Hawaii told us to just fax her to tell her to close our account after we had opened our new bank accounts in California, which we did. At the same time, we also informed our life insurance company that we had a new account and to withdraw our premium from our new account.
But the bank manager happened to be on vacation that week and didn’t tell anyone else about our arrangement, and the insurance company didn’t do as we asked and tried to withdraw the payment from our old account with no money left. It took a few days to straighten out, but we got the insurance company to put the money back and take it from our new account, and the bank manager removed the fees when she came back from vacation and closed our account for us.
Aug 29th, 2008
Matt @ Steadfast Finances
I’m w/ Penelope on this. I had a similar situation happen about 5 years ago when I had a job requiring an AMEX corporate card (but was linked to my personal bank - screwed up situation).
Anyways, I called AMEX and complained it was a simple mistake on my part. They removed the fee, but I had to give my billing information of my high savings account over the phone during that customer service conversation so they would receive the funds I owed at precisely that time.
Secondly, my fee removal could have been affected since my company had a direct business relationship w/ AMEX. Good luck if you try.
Aug 29th, 2008
Mrs. Accountability
Ah yes, I call these my True Confessions posts. When I’m not particularly happy about “keepin’ in real”. Will anyone on either side reduce any of the fees! Bummer!
Aug 29th, 2008
Kym
I had something similar happen last year, though not with my credit card. With transferring money from the wrong account. I was moving money to ING from Wamu, and I moved it from the wrong Wamu account. Everything was dandy from ING’s side, but Wamu hit me with NSF fee, also $38 like yours. Then, my landlord tried to cash my rent check during this 1 business day that the problem occurred on, drawing from the now empty Wamu account. Bam, $75 late rent payment fee, $25 returned check fee, 3 day notice to pay or quit. Also that was my first full month of living in that apartment (moved in halfway through the previous month), so the landlord really loved me.
Aug 29th, 2008
Alison @ This Wasn't In The Plan
My only credit card fee and interest charges resulted from a payment mix-up as well. We were able to get the charges reversed for being good customers (good customers that never let them earn interest from us, but good nonetheless). I hope you had good luck as well! I’ll be reading Monday to find out.
Aug 30th, 2008
ccwoman
Hope you got a good answer from your CC company on why they attempted to resubmit the payment on the ‘brick and mortar’ account. If you didn’t here is the reason, they are resubmitting the original payment request that was made. They are not permitted to initiate a new payment request with the new information. Only you can initiate a new payment request with the new information. If you had called your CC company when you realized the first transaction did not clear they should have told you there would be two to three more attempts against the same account. If they didn’t tell you this, which would have given you time to cover the check for the future attempts, then you would have a good case for a fee waiver of at least some of the NSF fees on your CC statement. On the late fee waiver…..well you were late. That would be a justified fee. The interest you were charged would be somewhat adjustable but in the big scheme of things finance charges are never very much.
Aug 31st, 2008
Anna
Oh man! That sucks, but I think we’ve all done something like that at some point. Live and learn and try again!
Aug 31st, 2008
Kevin
@CCwoman: That’s pretty much exactly what happened. I think deep back in the recesses of my mind I knew this because I used to work for a rental car company and there were certain ways to get money off of a credit card for a car that was late in being returned (and no one was answering the phone, etc.)
The things is, I forgot that and the rep I talked to made no mention of it. So it was like Boom — one big hit, fee, put the money back, breathe, then Boom again and fees all over the place.
Sep 3rd, 2008
Funny about Money
Wow! What a fiasco! It sounds like the sort of tangled web I spin every now and again…all it takes is being a little tired when you sit down to do the books.
In my experience, Amex has been fairly forgiving of screw-ups, mostly because I pay my bills on time. Especially since you could argue there was a mutual screw-up going on, they may back down on some of the fees. It’s worth a call.
Sep 7th, 2008
Kevin
@Funny: Yea, they weren’t too bad about it.
Sep 7th, 2008
b aro
Chase will not waive Late fee or fiance charges at all. no more chase card
Nov 17th, 2008
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