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.