Delayed posting of payments leaves card customers howling


`Zero tolerance' policy causes late-payment fees

Dollars & Sense

November 14, 1999|By Liz Pulliam | Liz Pulliam,LOS ANGELES TIMES

I have a platinum MasterCard. I went over my credit limit because the card issuer said it did not receive my last payment in time to be posted. I use a postage meter, and the payment was sent to the company two weeks before the due date, for an amount that was triple the minimum payment.

The company claims it did not receive my payment until a week after the due date. It slapped me with an "over credit limit fee" of $125, plus a late fee. When I called, the phone representative said that the company does not consider postmarks on envelopes, even if registered, as the date payments were received. It considers payments received when its credit people post them to the account. Have you ever heard of this?

Unfortunately, yes. By law, credit-card companies are required to post payments as soon as they are received. Companies are not required to pay attention to postmarks. Many companies rely on outside processing companies to open envelopes and record payments for them, which should reduce the incentive to post payments late. But by the volume of consumer howls, the system's not working.

The problem stems from the card companies' own policies. In the past two years, most credit-card companies adopted a "zero tolerance" stance on late payments. Where you used to get up to 10 days after the due date before you were slapped with a late fee, today most card companies don't give you a minute's grace.

Customers have sued the companies, sometimes successfully, over their late-fee practices, with some claiming the card issuers failed to acknowledge payments sent weeks in advance or even changed due dates from month to month to confuse customers and reap more fees. Some companies also have a nasty habit of jacking up your interest rate if you're late with a payment.

Two of the companies that were most criticized, First USA and Providian, have since reinstated some leeway so that you are not charged should your payment arrive a day or two late.

Your only mistake was in accepting the phone representative's word as law. Demand to speak to the supervisor. Explain that you will transfer your balance to another card and close your account if the fees are not waived.

The key is not to argue with the company about whether its policy makes sense; shift the discussion to whether it wants to keep you as a customer. Consider taking your business elsewhere even if the company grants your request; a $125 over-limit fee is ludicrous.

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