How to Wipe Out Credit Card Late Fees & Bank Overdrafts
Late fees suck. I have 4 checking accounts and three credit cards. Before I get ripped for admitting that as the author of a personal finance site, let me quickly explain. I have two checking accounts at two different banks, two for personal use and two that I share with my wife. Why two banks? I fully expect one of the banks to go public someday, and I want to have holdings there in the event that they do (you can actually buy discounted shares when this happens).
The three credit cards can be boiled down to one for myself, one I share with my wife, and a third because it basically offered me a free flight and has no annual fee. I don’t carry a month-to-month balance on any of the cards, and only use credit cards in a way to better my financial situation.
Oops, I’m Late. More Credit Card Late Fees!
The one problem with carrying this many financial accounts is that from time-to-time it is quite possible that you neglect to re-balance your account. Perhaps a payment reminder ends up in your spam filter or your payment doesn’t process on time. The result is a bank overdraft or a credit card late fee. This has happened to me four times, at a $25 fee per occurrence. However, I ended up not paying a dime for my mistakes and you shouldn’t either.
Why Banks and Credit Card Companies Should Waive your Late Fees
First, let’s be clear. This strategy may not work for everyone. If you have a history of over-drafting or missing your credit card payments and don’t have strong credit, you’re probably not going to be able to talk the customer service rep into waiving your late fees.
Second, if you owe a lot of money on your card, you’re probably not going to get a break.
Third, if you try to take advantage of a financial institution’s forgiveness and become a common repeat offender, they are much less likely to be accommodating.
On the other hand, if you have a history of good credit and on-time payments, you should be able to get away with these annoying fees. Here’s why: these financial institutions have no leverage to keep you around if you’re not happy with their service, and the advertising fees they pay to acquire a new customer are much higher than the $25 fee they’re getting from you. If they don’t bend over backwards to keep you happy, there’s hundreds, if not thousands of other institutions for you to take your business to.
How to Get your Bank Overdraft Waived
- Rep: Thank you for calling Your Local Bank, my name is Friendly, how may I help you?
- You: Hi Friendly. I just noticed that I over-drafted on my bank account. I feel horrible and would like to resolve this immediately. May I send in a check or cash to get this taken care of?
- Rep: Absolutely. Here’s our address.
- You: Thanks, Friendly. This never happens to me, I noticed that there’s a fee on my account for this, is that correct?
- Rep: Yes it is. Let me look at something real quick. OK, we can waive this fee for you because you don’t have a history of overdrafts.
- You: Gee, thanks Friendly. You’re the best. You have a wonderful day.
If you have to directly ask for them to take off the fee, don’t feel ashamed in it. Others do it all the time. They’ll most likely give it to you. If they don’t, maybe it is time to find another bank, or at least have a talk with their manager first.
How to Get your Credit Card Late Fee Waived
- Rep: Thank you for calling Your Credit Card Company, my name is Slightly Less Friendly, how may I help you?
- You: High Slightly Less Friendly. My credit card stopped working, so I went online to check my balance and noticed that I missed my payment. I’m really embarrassed about this and would like to take care of it immediately. In fact, I just submitted my payment online before I called you. Should my card start working now?
- Rep: Let me check. It looks like your transaction has processed. It usually takes 2-3 business days to reflect in your account and your card will be active at that time.
- You: Thank you. I don’t know how I missed this, I always pay on time. Could you find it in your heart to waive the late fee for me?
- Rep: Let me look. I do see that you have a history of paying on time, so I am able to waive the fee for you this time.
- You: Gee thanks. You have a great day.
The credit card company is usually slightly less accommodating than the bank when it comes to waiving these kinds of fees, but they shouldn’t give you too hard of a time. If they do, it may be time to find a new credit card company.
Being Honest, Friendly, and Responsible Pays Off
If you have a good financial history, own up to your mistake, and use kindness versus intimidation, there should be no reason why you have to pay these annoying late fees. Don’t be afraid to ask, you’ll usually get what you want. If not, look for a customer friendly institution to move your business to.
Reader Feedback:
- Have you found any clever ways to avoid common annoying late fees from your bank for credit card company?
- How much does your credit card company charge for a late fee?
- How much does your bank charge for an overdraft?
If you found this article helpful, you can subscribe to the 20somethingfinance RSS feed, or sign up for free email updates. You may also find the following articles of interest:
Forget Dave Ramsey, 5 Ways I’ve Used Credit Cards to Better My Financial Health
Thanks for the tips. I recently found a $25 fee on my account and I have no idea why cause I always pay on time. I’m going to call up and after finding out what it’s for use your tips to get it waived.
Craig
http://www.budgetpulse.com
One way to avoid charges like this is to pay the bill WHEN IT ARRIVES; don’t play games with due dates - you will inevitably lose.
Another good practice is to pay online at the Payee’s site if they allow it. This means that you have that they are aware that you initiated a payment.
I tend to stay away from Bill Pay - the way that most Banks seem to do this is that they send the payment onwards in the form of a check, which is inefficient and time-consuming.
Probably it is helpful to mention your savings account etc. balance with the
bank as you can not only take your card business elsewhere you can also move your account. Only if you need the big guns!!
I also have several bank accounts and several credit cards for similar reasons. I do not carry balances on my credit cards and use them for convenience and cash-rewards rebates. In my entire life I have made, perhaps, 3-4 late payments and, in the past, have had good results with methods such as given above.
Unfortunately, the most recent incident, was less than satisfying…I usually pay my bills the first weekend of the month - this month I was distracted by election hoop-la and so sat down to do it this morning and found that one of my credit cards was due yesterday. I paid the balance in full online - called to report the payment and spoke with a customer service rep - going through the spiel I got nowhere! I was told “We don’t have the option to waive late fees.” What?! This was with Chase so I then threatened to take my business back to Citibank - no go.
$39 is awfully steep for a less than 24-hours late payment on a card with an otherwise 100% clear payment history - now the question is - Do I make good on my threat to change companies? Or just write an angry letter to blow off my ire?
@ Doc - the choice is yours, but here’s how I would tackle it in 3 steps:
1. Get another customer service rep on the phone and try again. If your first try was with ‘ire’, then try a warm, friendly approach.
2. If you get nowhere there, ask for their manager.
3. If you get nowhere with the manager, write a letter.
4. If you still get nowhere, make good on your threat.
Best of luck to you!
GE
@Doc,
I’m sorry this happened to you, though I am sure that the CC company isn’t.
Give them a call. Use the iron-fist-in-a-velvet-glove approach. Ask nicely, be polite (remember you’re talking to a low-paid cube-dweller), and if they refuse, ask to speak to a supervisor (aka the low-paid next-door-cube-dweller). If they flatly refuse, pay off the balance, then call to close the account UNLESS they refund that charge - and take your business elsewhere.
This is the reason that I have given up on Credit Cards. Yes, I have two, but I have used each exactly once this year, and paid them off when the bill arrived.
[...] This is the biggest contributor to a healthy credit score, making up 35% of your credit score. Even one late payment can result in a significant drop in your credit score (50 to 100 points or more). If you are late on accident, pay the amount immediately and speak with your creditor about reversing any late fees. [...]
Doc,
I had the same issue with a Chase Visa charged $500-$600 a month
and pay every month. Got $39 late fee, Chase would not waive so
I closed the account on the spot (25k limit).
Leave a comment!
Subscribe
All Categories
Posts By Month
Recent Posts
Poll
Blogroll
Random Posts
Latest Video Post
Recent Comments
Top Commentators
Twitter Updates...
Posting tweet...