How to Fight Late Fees & Overdrafts
Credit card late fees and bank overdrafts 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.
Update: There have been new bank overdraft protection rules put in place by Congress that should help you limit your overdraft fees. Banks will now ask you if you’d like to have the service of not running out of funds when you overdraw. If you decline the “service”, your charge simply won’t go through and you won’t have to pay an overdraft fee.
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. Threaten to leave, and you’ll usually get results. It costs credit card companies over $100 to acquire a new customer.
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.
Fees and Overdraft Discussion:
- 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?
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.
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!
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.
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).
Last year I had an incident with Citi which was similar – a crazy loss of cohesiveness led to me not to paying my bill on time, despite the fact that I normally pay off my card completely each month. I sent them a message of apology through the online messaging center, and not only did they waive the late fee, but they waived the finance fee that would have been on the next bill for passing the grace period, and I later confirmed that they did not report it as a late payment to the credit bureaus, so my credit is still clean.
Citi may be big and potentially evil, but they definitely treated me well for that incident.
i had excellent credit. I moved and told the po but did not tell citi because I hardly use their credit card. they don’t seem like they want to remove the negative report although they did drop the late fees.
NO. Citi is a bunch of JACk ASS Incompetents that don’t know where the hole is on the front end or the back end of a donkey when trying to work with them in disputing a credit card finance & late charge. The reason I can say this is that I work in corporate america & I see how they hire their customer support in the phillipines who understand the simple basic customer support iisues. However, when you have a more complicate issues that require some hard work that shitty CITI Custer service rep need to do to resolve the issues, it looks like it is left up to you to figure it out when you already know for a fact that you had pay on time, but because of some BS issue I.e. due date was on a Sunday, they cash your check a day late, they expect you to pay for their mistake? This is why CITi is shitty. In my highly professional opinion, I would highly recommend all CITI credit card holders to close out their Citi credit card & get a new one don’t do capital one either. The reason why I don’t recommend both these credit card companies is because they advertise so heavily on commercial TV to get new customers to replace professional business customers like me who is not going to put up with their shitty services'(trust me, the rewards are not worth it to do business with them). Other smart professional business people don’t have time to waste especially when dealing with incompetent credit card companies. For a busy business professional TiMe is Money! But the IDIOTS at CITI don’t see it that way….Oh well:)
How about this. Avoid late-fees, forgetting automatic checking withdrawal payments, on-line payments etc.. Basically anything you don’t want to forget and it’s free! “www.billjolt.com”
chase must be losing a lot of business…I’ve called twice, emailed once and still no waiver of $39 late fee. I just get the standard reply, we can’t do anything. I paid one day late. Ridiculus way to run a business and lose customers!
I spoke with 6 people for nearly an hour from both Wamu master card representatives to Wamu bank.
They gave me a really hard time, and made me so frustrated now…
They insisted that the late fee was my mistake, and they would not waive it for me.
I wonder why there’s a policy to allow user to waive one purchase payment each year, but not the late fee. That is really unfair.
ALSO, those representatives i spoke with, were really unfriendly! I felt like crying when I spoke with the 6th person…
Who can help me to deal with it?
Thank you so much,
One thing you have to remember is that the Credit-Card folks are _praying_ that your payment arrives late. If there was a way for them to legally delay all payments until after the due date, then sock you for late fees, you can be sure that they would. That is how they make their money – and in these “lean times” they are going to hang on to every dollar that they can squeeze out of you.
The only thing that works with these bozos if the threat to take your business elsewhere, and that threat only works if you can afford to pay off the balance in full… and _that_ only works if your Credit-Card is not your “Emergency Fund”.
I have two cards – a Discover card and a Mastercard. Between them, they have been used three times in the past year.
(finishing the thought) … I pay the bill in full when the statement _arrives_ and never carry a balance.
I am actually on the verge of canceling the Discover, as I am annoyed with them – they keep sending me “convenience checks” (which I don’t want and never use) even after I have told them not to do so. I suspect that they enclose these so that you are not so inclined to throw their junk mail away without opening and inspecting it.
It is so frustrating trying to get anything done with the banks. If you close your account it shows on your credit as closed by consumer – I am told that can be reflected negatively on your credit, reflected in your FICO score.
You are right. Sort of.
The FICO score is calculated as follows:
35% Debt History
30% Debt level
15% Length of Debt History
10% New Debt
10% Type of Debt
Canceling a long-standing CC account can therefore cause a drop in your credit rating. Buy my understanding is that the impact will be minimal.
A FICO score is only important if you are planning on borrowing money. If you have a mortgage and savings, it is not that important. The problem is that most of the banks have turned into “FICO monkeys”, making decisions based solely on FICO scores without any due diligence. Taken to an extreme, this means that if you have a million in the bank and haven’t borrowed money for 7+ years, you have no FICO score and are therefore… a deadbeat.
To quote Timon the Meerkat: “DID I MISS SOMETHING???”
Hey, nice tips. Perhaps I’ll buy a glass of beer to the person from that forum who told me to visit your site :)
The late fees are complete ripoffs, especially from the credit card companies.
With the exception of a couple times in my entire life, I am never late on paying anything.
The recent $29 late fee only served to tick me off. So since they want to keep me as a customer, and want to keep earning money on me, I told them to cancel my card if they cannot take the late fee off. They did. The only other time the credit card company refused to budge. So I told the rep to cancel my card right then and there. The rep then asked what they could do to retain my business. I said, “are you kidding me? you rip me off and want me to continue with you?” They said they would credit my account, but at that time I told them don’t bother, damage was done and I no longer wan to do business with them. She went round and round on how to keep me as a customer. I wasn’t interested, but it was fun to hear THEM grovel.
Iron Door, no, closing your account doesn’t reflect negatively. In fact, it works the other way around. As long as your history is good on payments and nothing is ever in default, the less accounts you have open, the better your score. I’ve done this many times, my score is close to 900.
In my experience that’s not quite true.
I recently canceled a year-old Discover Card and my credit score dropped by a statistically-insignificant 16 points. That was the only recent change – I now have only one card (zero balance) and no debt besides 60% of the value of my house.
FWIW, A family member who makes less than half of what I do has a higher Credit score than I do! How does _that_ work?!
Closing a CC account _can_ affect your credit score (though it really shouldn’t!), though the effect is not large and it is proportional to the time you have had the card.
Thank for such a nice tips. Let see how much I can reduce from great advise.
I incurred a $39 late fee (with subsequent $5.90 finance fee) on a Chase CC.
The bill was due on a Sunday and my payment reached them the following day: Monday.
I may or may not cancel this card but I will not be using it anymore…Its already cut up.
OH…and all those advertised offers I get with my bill every month…they’ll be getting the sanitized versions of those mailed back in the payment envelope…and any postpaid Chase CC applications I see in banks or store or campus locations…Yep, their gettin’ ALL those back too…year after year after year…
I’m a petty kinda guy.
I once only paid the penalty on map. I consider everyone should supervise the grace period end
Waiving off is a good practice for those companies who have strong clientele who pay them in time. Such companies can easily waive off to retain their customers.
Nice tips and very informative indeed!!
i just paid my chase cc bill one day late for the first time, and they won’t take off the $39 late fee. I have been late with other cards and they gladly took off the fee. i think it’s time to change banks. this is just stupid on their part and no way to treat a good customer!
Chase Visa. BAD NEWS. I always pay in full and on time. Had one payment miss the due date in October by a couple of days. I called to request they waive the $39 late fee in light of my excellent record and our long term relationship. (And I was very friendly with them.) No way in the world would they waive that fee. Sheer stupidity to lose a customer like me over this. Not only does it cost much more to acquire a new customer, but the bad p.r. they will incur will encourage many others to avoid them.
I use my Chase Amazon card only for the holidays, paid the November due amount on 11/5 and the December on 11/25. I actually paid $100, well over the minimum due, but received a $39 late fee on my next statement. In retrospect, I think it’s because the $100 was received 3 days before the statement period 11/28-12/21. But clearly it was intended, and sufficient, to make the December payment.
i finally got chase chase to take off the fee after first trying to call with no luck. then i emailed them through their message center under ‘late fee reversal’ and wrote them a letter why they should take it off since i was such a good customer. surprisingly, they took it off! i guess you have to try everything before they give in.
I will never do business with Lord and Taylor ever again… I can’t believe that they will charge 29.99 for a late fee when it was only late a matter of hours. It was an oversight on my part, however, the supervisor refused to waive the fee. I will now pay off the remaining balance and cancel their card. They will never get my business ever again, and will let everyone know that this is not a consumer friendly company. It is highway robbery to charge 29.99 when your balance is $110. They entice you to use their card then when you use it, they charge mobster fees because you are late a couple of hours.
It’s a shame you paid it because legally speaking if you went to a court of law and disputed the charge you wouldn’t have to pay it. It’s unreasonable to charge 25 dollars because you were late by a few hours one time.
I just need this article on How to Wipe Out Credit Card Late Fees & Bank Overdrafts. For the life of me I can’t get it to download.
I greatly appreciate it if you could send me any information on late fees and overdraft fee on banking accounts. My husband went over the top spending wise since he deployed to Afghanistan.
I thank you for your time, and really do wish you could provide mw with all services dedicated to this problem of overdrawn – by quite a bit- and How I can send a letter explaining why this happened to me. I am a loyal customer. Just financial problems since he got back for his r&r.
Sincerely Catherine McDonald
What a lot of you have to understand is that frequently, you think you’re The Greatest Customer Ever, but really, REALLY … you just aren’t. Let me try to explain.
As the handle I used suggests, I work for a credit card company. I get to listen — all day, every day — to people going on and on about how they weren’t REALLY late, even though they clearly were, who are “good customers” and we should totally waive their fees, and oh boy … if you get one who’s TOO nice at the beginning, watch out. You just know it’s because they want something.
It’s frustrating because many times, before the customer even asks, I already know I’m going to have to say “no,” and I know the question is coming, and I know what’s going to come after I give the bad news. Try to imagine what it’s like dealing with a child: you say “no,” and the child keeps asking again and again, and no matter how much you say “no,” it just doesn’t take. “PLEEEEEASE!” “Why not??” Now imagine you have to treat that child like an adult and even be extremely polite besides. Oh, and you can’t end the conversation. You have to remain patient and calm while being berated endlessly about something you can’t change that was caused by the irresponsibility of the person berating you. And this will happen dozens of times per day, every day.
Here’s the thing: before you ever pick up that phone to call, the decision has usually basically already been made. Believe me, the bank KNOWS how good of a customer you REALLY are, and I don’t just mean how frequently you’re late; more significantly, it’s about how profitable your business is to the bank. In your mind, you may think you’re just the greatest thing since sliced bread, but in reality, the bank may actually be LOSING money on you.
If you want to ask for fee waivers, fine. Ask. I personally won’t do it, because I believe in personal responsibility. That’s just me.
But understand that if you ask and get a “no,” it’s probably NOT because the long-suffering person on the other line is a big meanie who’s out to get you. It’s probably because he/she is looking at a screen that flatly says you aren’t entitled to a fee waiver, and that’s that. Why? Because you’re not making the bank enough money to be worth it.
There a whole other reason why credit card companies will waive the late fee. And that is because it can be considered an unjust charge depending how much you owe. If you’re late one time by a couple days legally speaking they can’t charge you 35 dollars for this. It’s an unreasonable charge. So if someone calls the credit card company about the fee they will waive it. They don’t want to find themselves in a legal battle they will lose. The only reason they get away with it is because most people don’t know better and will just automatically pay the fee.
That’s not true. It’s in the cardmember’s agreement that you agreed by obtaining and using your credit card. The agreements state that if your payment is made after the due date, then it is considered late; and the account will be subjected to a late fee, and applicable finance charges for the unpaid balances. The late fees are clearly described, as well as how to avoid it.. Such as paying online, by phone, by mail/check, sometimes by paying at a branch (like for Chase, Citi).
I paid my Chase visa online on 8th and was charged $15 -total due on my visa was $51 -they confirmed I have always except once paid my visa bill on time. Sometimes computer system is so slow I cant pay online.
Wow! This could be one particular of the most useful blogs We’ve ever arrive across on this subject. Basically Excellent. I am also a specialist in this topic therefore I can understand your hard work.
I was late last month for the first time ever. I payed it the next day. This month I made sure to pay it before hand. And I STILL got a late fee! It’s mind blowing. I called and talked to a customer service rep and nothing. I tried again and she told me the same thing. The fee could not be waived. I’ll forsure close my account, 39 dollars down the drain for what? Paying 6 days before was a waste of time and money.