Credit Card Business "Rife With Scams"

Dear Credit Mama,

First, the credit card companies started changing the payment due dates on me. I used to get the bills about three weeks in advance of the due date. Then suddenly, it was two weeks. Now sometimes it seems like less than that.

I'm smart enough to always look at the due date right when the bill comes in and mark it on my bill-pay calendar. But last month they hit me with a late payment charge… when I KNOW I sent the check with plenty of time for it to arrive at the processing company. I'm lucky that this wasn't a card with a 0% "provisional" rate since that would have been bumped to 32% with this one wrongly-processed payment. I feel like their game now is to nickel-and-dime any extra fees they can squeeze out of the average consumer! Is it just me??

-- Joe "Fed UP" in N.C.

Dear Joe,

If you think that the credit card companies aren't necessarily on the side of consumers, you're right. The tactics that have been used increasingly over the past several years have capitalized on the tendencies of consumers not to look at their bills too closely, not to question extra fees, and to pay their bills as close to the due date as possible.

Thought I'd share an interesting comment that was posted on a diary on the dailykos.com blog. The author, KeepingItBlueKrstna, gives an insider's perspective on what it's like to work at a credit card company and offers some nuggets of advice:

I worked for a major credit card company, which has since been bought and then bought again, but it was one of the major players.

When I worked there, it was clear that the processing company we used was late posting payments that had arrived on time. They did it all the time.

The Customer Service Reps brought it to the attention of management and it was escalated all the way to the CEO. So did they fix the problem? No. They made a video (I kid you not) of how efficient the payment processing company was and how their systems worked and held a meeting to show it to us. They told us, sure you get a lot of calls about this, but it's because there are only so many possible due dates, and you'll get a wave of calls about late fees after certain due dates. They said "It's the customer's fault" (or the post office's fault) and don't waive too many late fees.

This was a large scale fraud like the one described above where statements are mailed late. And it wasn't just the late fee revenue they were after. They used people's "late" payment history as an excuse to raise their interest rate on the card to penalty levels, even if that was the only late payment. In some cases, they used that one "late" payment as an excuse to change someone to a card with an annual fee instead of none.

The credit card business is rife with scams like these, masquerading as a normal way of doing business.

I strongly advise paying your credit card bill online within the terms posted there. If it says your payment will be posted in 3 days, make it 4 days before the due date. This is, in my opinion, the only safe way to avoid late fees. If you are mailing your payment, no matter how careful you are, you could get screwed.

If you get an unfair late fee, you should not only call to ask for the fee to be reversed, but also at least ask to have that late payment wiped off your payment history. (We were able to do that - it was called a re-age, but don't use that term - someone may think it's fishy that you know it.)

We were told repeatedly only to waive fees for the very best customers and if we waived or re-aged too many accounts, we would get written up. But I did it all the time and never got written up. Especially for nice people.