Disputing Credit Card Fees Really Works!

awww yeah!

I like to think I’m as cool as this guy (Photo courtesy of Tomas Pihl)

I’m going to start by saying that nothing about today’s post is original. How’s that for a hook?

It is, however, an example of a successful execution of a very simple strategy that requires little effort and can save you some money. It’s a strategy I stole from Ramit Sethi, and you can read all about it firsthand in this article here: Never Pay Credit Card Fees Again.

So today I’d like to tell you the story of my embarrassing missed credit card payment and my subsequent successful endeavor to erase all financial history of that mistake.

I’m embarrassed. I missed a credit card payment.

This is not easy for me to admit. I had never been late paying a bill in my life. Ever. Until a week ago.

I have no idea how it happened, but last Friday the due date for my latest Target REDcard statement came and went without a payment. Needless to say, I was both surprised and embarrassed when I was doing my weekly spending overview on mint.com and I saw both a $25 late fee and a $10.30 interest charge. And that was for a meager $312.64 balance. That’s crazy!

At first I thought it had to be some kind of mistake, since missing payments just isn’t something I do. So I logged into my bank’s online billing system to view my recent payments, and there was nothing. I checked my email, where I keep the history of all of my bill reminders, and there was nothing. Finally, I logged into my Target REDcard account and saw that there had indeed been a statement and I had indeed missed the payment. I don’t know if they never sent out a notification or if I accidentally deleted it or what. But whatever it was, I definitely had some fees to pay and I definitely didn’t want to pay them.

Lucky for me, I knew what to do

Once I got past my initial embarrassment and frustration (no small task), I started making an action plan. The very first thing I did was schedule a payment for the entire card balance for as soon as possible. This payment included the previous statement’s balance, all charges made since then, and the late fee and interest charge. I wanted to wipe the slate clean and get back to a $0 balance.

I’ve been a fan of Ramit’s for a while now (his book I Will Teach You To Be Rich is a must-read for anyone just starting to learn about personal finance, especially younger people). I’ve used his negotiation advice before to do things like lower my TV, cell phone and utility bills, and I knew he had advice for this exact situation. So I Googled it and found the article I linked to above.

So I waited two days for my payment to post, and then I literally just followed the exact script from that article. I called up Target REDcard’s customer service and had this conversation, almost verbatim (if you read the original article, you will see how un-original this is, but it worked!):

Me: Hi. I noticed I recently had a late fee on my account. I’d like to confirm that it won’t affect my credit report.

Customer Service: Give me a minute while I check. (Pause). No this will not affect your credit report. I see that you did make a full payment and we only report to the credit bureaus if you are more than 30 days late.

Me: Great! Now about that fee. I’d like to have it removed.

Customer Service: Okay, let me check on that for you. (Pause). It looks like you’re eligible for a one-time complimentary fee removal, so I can care of that for you right now. You will see a credit on your next statement.

Me: Awesome! Thank you so much. Now I also see a $10 interest charge and I’d like to have that removed as well.

Customer Service: Sure, let me take a look. (Pause). Okay you also have a one-time complimentary fee removal for that as well, so I will take care of it. You’ll see that credit on your next statement as well.

Me: I AM THE KING OF THE WORLD!!!!!!!!!

Yep, it was that easy

Ok, so I made that last line up, but that’s how I felt. And yes, it was really that easy. There isn’t a shred of exaggeration there. The entire phone call, including my navigation through the dreaded automated menus, took a total of 5 minutes and 39 seconds. And it saved me $35.30. Not a bad use of time if you ask me.

What’s the lesson here?

Hopefully you never have to use this advice, since we should all be paying all of our bills on time. But we are human and we do make mistakes. When we do, we should remember that we’re not the only ones in the world who have ever made that mistake. There are likely many other people who have been in your situation before and will have some useful advice on how to handle it. It might take a little bit of initiative to seek it out, but if it can help you make something positive out of what would otherwise be a negative, it’s well worth it.

With regards to credit card fees specifically, obviously this is not something you could use over and over again. I doubt that it’s as strict as the “one-time” line they gave me, but if you’re constantly missing payments this will not work. But for those every-now-and-again mistakes that happen, this is a great way to make sure you don’t pay more than you have to.

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  • DC @ Young Adult Money September 27, 2013

    I disputed a credit card fee a long time ago and they cleared it. If you are a good customer to a credit card company they will always be willing to work with you. There’s fierce competition in that field, imo.

    • Matt @ momanddadmoney September 27, 2013

      Good point about the competition. There are so many options out there these days.

  • Alexa Mason September 27, 2013

    I have done stuff like this before too. I think most companies will always waive late fees the first time you are late. I’ve also tried to negotiate the interest on my credit cards but they usually tell me to call back in a couple of months. It’s always worth asking though.

    • Matt @ momanddadmoney September 27, 2013

      Have you told them you’ll simply do a balance transfer to a card with a lower right? That can be a good negotiating tool.

  • Justin @ RootofGood September 27, 2013

    Been there, done that. Credit card companies must be the easiest people to negotiate with. I have heard they will give you a “one time” fee waiver once per year if you ask nicely. If they start to push back, sell them on your longevity with their card or bank or the amount of monthly charges you make.

    I have probably had hundreds of dollars worth of fees waived over the years. Then again I must have close to 100 credit cards (sign up bonuses rock!)

    • Matt @ momanddadmoney September 27, 2013

      If they had resisted, I definitely would have pulled out the “loyal customer” card. And if they had kept resisting I would have pulled out the “I would hate to have to take my business elsewhere” card. I’m guessing one of those would have worked.

  • Andrew September 27, 2013

    I’ve done this before also…if you normally pay on time and missing a payment is an anomaly, they will take off the fee and interest. I’ve had a fee taken off even when it was not my first time…although the late payments were years apart. Like DC said…lots of competition with credit card companies, if you are a good customer, they’ll work something out.

  • John S @ Frugal Rules September 27, 2013

    I’ve done this before – a few years back and felt the same way. I hated that it happened and was embarrassed by it. Thankfully I was able to get it waived and I think so much of it comes down to being courteous when you ask. If you’re a jerk to the CS person, then why on earth should you expect them to do something for you?

    • Matt @ momanddadmoney September 27, 2013

      Totally agree. No matter how irritated you are it never pays off to be a jerk with customer service. Sometimes you have to be firm, but you can always do so in a respectful manner.

  • Holly Johnson September 27, 2013

    Sweet. I’m glad it was so easy for you~
    It happens from time to time….even to the most responsible of us. I accidentally paid the wrong bill on my online bill pay a few months ago and got smacked with a late fee.

    • Matt @ momanddadmoney September 27, 2013

      Yeah, it’s frustrating. Luckily it’s either an easy fix or you just move on with your life.

  • Grayson @ Debt Roundup September 27, 2013

    It just goes to show that the best thing you can do is ask. If you have great history, they will usually help you out. Oh, and you can’t call and be an a-hole. That never works!

  • Mrs PoP @ PlantingOurPennies September 27, 2013

    As long as it’s not a habit, most places are totally willing to work with you.

  • Stapler Confessions September 27, 2013

    It’s always worth the effort to ask! One month we were slammed with 3 different, stupid mistakes. I called all three companies: one didn’t do anything and two reversed the fees!

  • Shannon Ryan September 27, 2013

    The dreaded missed bill – I think we’ve all been guilty of that happening. 🙂 I’m glad your story had a happy ending, Matt. Most companies are good about waiving late fees, particularly if you’re a good customer. I think a lot of people don’t try or think it’s worth the hassle – but saving $35 for five minutes of your time is worth it in my opinion! Have a great weekend, Matt!

    • Matt @ momanddadmoney September 27, 2013

      It’s almost always worth the effort to ask. I think most people would be amazed with what they can get simply by asking the question. There’s no need to shoot yourself down. Let others do that job.

  • Kim@Eyesonthedollar September 27, 2013

    I’ve always had good luck getting fees removed because it isn’t something that happens often. We all do make mistakes or statements get lost or deleted, so I think cards are willing to work with you if you aren’t a bad customer. The only bank that would not help me at all was Bank of America, and it was over a reward points issue. At the time, we were using one if their cards for my business. I wanted to use points to buy Seaworld tickets, and I did, but accidentally ordered the deluxe package which came with transportation, which we did not need. I tried to get the points back and cancel that package, but they would not budge, so I promptly stopped using that card. We put $5K to $10 on a card per month, so they really lost out on that deal.

    • Matt @ momanddadmoney September 27, 2013

      I would have left too. That’s such a short-sighted decision on their part. I guess they figure that most people will be too lazy to actually do anything about it.

  • Done by Forty September 27, 2013

    I recently had the same problem: a new credit card we’re churning hadn’t yet been eligible for autopay for the first two billing cycles, I forgot to pay it before leaving for my hike on the AT, and it was due during that week. I tried that same strategy (twice!) but no dice. Amex wouldn’t budge (and I’m a former employee!). Anyway, it’s sound advice but I think a lot of times, it depends on who you get on the other end of the phone (or, at least that’s what I’m telling myself…I don’t want to believe it’s me!)

    • Matt @ momanddadmoney September 27, 2013

      Oh I’m sure it depends, both on the company you’re dealing with and the specific person you talk to. I certainly wasn’t expecting it to be so easy. And in the end, if they hadn’t credited it back to me I’d have no one to blame but myself.

  • Nick @ ayoungpro.com September 27, 2013

    Awesome story. I’m curious about negotiating for cheaper TV. Even though I don’t have cable, maybe I would if I could negotiate the ridiculous prices down.

    • Matt @ momanddadmoney September 30, 2013

      Oh you can definitely negotiate your cable costs down. I would think that’s especially true if you’re not already a customer, as they have to work so hard for new customers and they’d have you on the line ready to go. I bet you could get a great deal.

  • Stefanie @ brokeandbeau September 27, 2013

    Good to know I can call up the company if I ever miss a payment. I wonder if they’d give you a hard time about it if it happened again.

    • Matt @ momanddadmoney September 30, 2013

      I bet it wouldn’t be so easy if it happened again soon. But in another year or so? My guess is it would be fine. Better to just make the payments on time but this is a nice fallback option.

  • femmefrugality September 27, 2013

    So glad it worked for you! I’ve done this before. I almost never miss payments. When I do, I just do what you did. I call them up, share my embarrassment with them, tell them I never miss payments, and ask if I can have the fee removed. If there was a reason I missed (one time it was because my house was on fire the day before the due date,) I share that, too. If you’re humble, kind, and apologetic (and don’t make it a monthly habit) most CSRs will help you. It’s worked for me not just for credit card companies, but for insurance and electric bills, too.

    • Matt @ momanddadmoney September 30, 2013

      Oh wow, I think your house being on fire is a good excuse! Glad everything worked out okay. Your point about being humble and kind is a good one. You won’t get very far being a jerk.

  • Jacob @ iHeartBudgets September 28, 2013

    Done this 2 times ever. Always works! Bummer you had to use it, but glad it worked out well 🙂

  • E.M. September 28, 2013

    I am so glad I’m not alone on this one, so thank you for posting this! I always paid my credit cards on time, but somehow I missed a payment about a year or so ago now. The balance wasn’t much so I did what you did and scheduled a payment for it. I then googled around and found that Capital One will usually waive the fee and make sure it doesn’t impact your credit score. Nervously, I opened up the online chat and talked it over with a customer service rep and they assured me everything was fine and they would credit the late fee. It was such a relief! I was so scared it would leave a black mark on my credit. Now, I have it set to automatically pay the balance every month so it never happens again. Glad to hear it worked out!

    • Matt @ momanddadmoney September 30, 2013

      It seems like a pretty common theme that it works as long as you’re typically a good customer. I was nervous about the credit hit too (though one late payment certainly won’t kill you), but it’s nice to know that there’s a little leeway there.

  • OneCent AtATime September 29, 2013

    Sometimes even requesting to forgive a fee also works, once I paid my dues two days later than the due date and my request for late fee waiver was granted by chase.

    • Matt @ momanddadmoney September 30, 2013

      Yep, that’s pretty much exactly what happened here. I was just a few days late and they forgave the fee. It’s nice to hear that this is such a common theme with these credit card companies.

  • MoneySmartGuides October 1, 2013

    I’ve done this myself. I missed a payment and gave them a call. A simple explanation that I forgot and just sent in payment worked for me. Of course, seeing that I am a good customer who is never late probably helped as well!

    • Matt @ momanddadmoney October 1, 2013

      It definitely helps to have a positive history for sure. They want to keep customers who regularly use their card.

  • Irene Pugachova August 31, 2014

    Just had an awful experience with Target credit card. With all the new features like Cartwheel, free shipping, 5% etc., decided to reapply after several years of break. Month passed – no online notifications that statement is ready, no mail from Target. Then yesterday card was declined. Opened my online account profile just to find out that it is 3 (!!!) days overdue. Got $25 late fee and $10.73 accumulated. Right before my own eyes access to my online account was blocked. Over the phone they waved only late fees, despite a confirmation from me that I am willing to pay a full amount. My opinion – Target loosing it! From their in-store Customer service, to indifferent phone reps. – they don’t give a… I cancelled the card gladly! Love Target merchandize, but there will be VISA all the way from now on!

    • Matt Becker August 31, 2014

      Sorry to hear you had such a bad experience Irene! I would probably switch if that happened to me too. No sense in putting up with that kind of (non) service.

  • Sarah @ A Dash of Sarah October 5, 2014

    Totally worked for me! She actually offered to remove the late fee before I could even ask! Great customer service 🙂

    • Matt Becker October 6, 2014

      Awesome! Glad to hear it was so easy! It’s nice when you get one of the good ones on the phones. Makes things so much more pleasant.

  • Michael H July 1, 2017

    Hey, I know this is an old post but I could some advice.

    I got sucked in to Target’s red card at the register one day. I made a small purchase of $28 and promptly forgot about the card. I am usually meticulous with my finances and never get late fees for anything. Somehow I did miss the first payment and did not realize until after the next billing cycle. I called them to ask for a waiver of the late fees and they refused, said they were unable to do so because of their rules and they treat all customers equally so they don’t waive fees for anyone. I spoke to a sup’v who told me the same. I paid the initial purchase and cancelled my account but refused to pay the late fees. By now I am 3 months in with late fees, have spoken to multiple reps and sup’v and they refuse to budge. I can’t see myself paying $111 in fees for a $28 purchase.

    Please help!!

    • Matt Becker July 1, 2017

      I’m sorry to hear that Michael. I wish I had something insightful for you but I don’t know of a way out of this given that you’ve tried multiple times and they’ve given you the same answer. It if were me, I would just pay the late fee. I would be pretty upset about it as well, but it’s much better than having it sent to collections or something like that.

  • lisa October 11, 2017

    She actually offered to remove the late fee before I could even ask! Great customer service

  • Katie W March 7, 2018

    I think they are becoming more strict with this. We always pay on time but missed this bill and paid it ONE day late. I spoke to 2 different people in customer service and I got the impression they didn’t even understand what I was asking. They said they report everything to the credit bureaus and I would have to talk to the credit bureaus to see how it would affect my score. I said that sometimes companies do not report a late payment until it is 30 days late and is it possible for this not to be reported since we always pay on time and we only paid one day late (I don’t even mind paying the late fee, I just don’t want it to affect my credit score). They said they could reverse the late fee but that it would still be reported. They said since it was reversed it would be reported as a negative (whatever that means – they could not explain what the meant). I just got the impression that they didn’t really know what they were talking about or what I was asking.

    • Matt Becker March 9, 2018

      Huh, that’s surprising to be honest. May I ask which credit card company it was?

      • Katie W March 9, 2018

        It was Target RedCard. My husband and I kept calling and speaking to different reps and they kept giving us different answers. Some said that everything is reported and some said that it is not reported unless it is more than 30 days late. One person told me the fee could be reversed but that my husband would have to call to do it since he is the cardholder and I am an authorized user. Then, all the times my husband called everyone he spoke to said the fee could not be reversed. He finally asked to speak to a supervisor to see if we could get a straight answer on whether or not this will be reported. The supervisor said it would not be reported unless it was more than 30 days late. So, fingers crossed that this is actually the case. I guess we will just have to wait and see.

        • Matt Becker March 9, 2018

          Oh man, I’m sorry you had to go through all of that. Hopefully it all works out in the end, but either way it sounds like a terrible experience.

        • Christina J. May 28, 2019

          I know this is an older comment, but just wondering what the outcome was with this impacting your credit score. I just had the same experience. I paid my bill about 7 hours late and was able to get the fee waived but the rep told me it still gets reported to the credit bureaus, but that they’d see I had paid the late fee? I kept trying to ask in different ways and she told me it shouldn’t impact my credit score if I pay all my bills on time. I don’t think she understood what I was asking.

  • Kristina February 13, 2019

    Just used your script to call about being late on my Target RedCard. Worked to a T!! I can’t believe its 2019 and they’re still following this exact script. I was mind blown that it worked so well! Thanks so much for the tips! 🙂

    • Matt Becker February 13, 2019

      That’s awesome! I’m glad it worked for you too. Some of this stuff is so formulaic. Thanks for sharing!

  • Anastasia March 29, 2019

    I am a single mom with 3 kids and I am really good about playing my bills on time but one night I had the site open to pay and my daughter woke up sick and I had to deal with that and I ended up laying down with her and I woke up at 1am and freaked out and paid right away. Of course I got a late fee of $28. I am financially unable to pay the balance but I did call and ask to have the fee removed and he said yes! I’m so glad I read this! The only catch is that I do have to pay the fee this time because the payment has already been generated, I have to pay my payment plus the fee this month but it will be deducted from my balance. Kind of confusing. I basically am just paying extra this time and then they’re getting $28 to my account.

    • Matt Becker March 29, 2019

      Oh man, I’m sorry you had to deal with all of that but I’m glad that it’s working out in the end.

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