Guide to Credit Cards: What If You Get Hit With Credit Card Fees?
Getting your full credit card balance direct debited to your checking account saves you money, saves you time, and reduces the stress in your life. But what if you haven't yet set up that direct debit, you make your credit card payment late, and you get hit with a late payment fee?
Here's the secret most credit card companies won't tell you: if you call up the credit card company and ask, they'll probably refund the fee.
It's worth your time. Bank of America, MBNA and Providian now charge as much as $39 for a single late payment fee. If it takes a 20 minute phone call to ask for and receive a refund, that means that you are effectively earning $117 per hour (after tax!) to make that call.
We've already seen that late payment fees are a big profit generator for credit card companies, so it's possible that you won't get your fee refunded without a fight. Here are some tips on how to persuade the credit card company to reverse that late payment fee:
- Be polite and courteous. Here's what one reader of this guide, whose spouse works in the credit card industry, recommended: "Remember that the person answering the phone is not an evil loan shark, but a regular Jane/Joe trying to pay the family bills".
- If it's your first time requesting a fee refund, say that. Credit card companies are more likely to hit you with fees if you are a recurring late-payer.
- If there was a personal reason for your late payment - perhaps you were travelling - tell them that.
- Credit card companies have a particularly irksome habit of setting the payment due date on or just after a weekend, when a check sent to them will be delayed or cannot be cashed. If you got the check to them immediately after the due payment date, point that out to them.
- Don't give up. If the customer service representative you speak to won't grant you a refund, ask to speak to a manager.
- If all else fails, threaten to stop using your card altogether and move to a competitor's card. Customer acquisition costs in the credit card industry are high, and credit card companies don't want to lose their current customers.
Bottom line: if you get hit with fees, call the credit card company immediately and politely demand a refund. You'll be surprised how much money you can save yourself.
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