Double check credit card payments!

[Meadbh]

Well, I screwed up. I made a typo and paid $1117 instead of $1177 on a credit card bill. My next bill shows $24 in interest charges, 12 days later. It turns out that interest is being charged on the entire bill, not just the $60 difference between what I paid and should have paid. The financial institution has agreed to reverse the interest charge as I am a longstanding customer, but it just goes to show how careful you have to be to avoid getting gouged.

 

[retire@40]

Wouldn't it be easier if you just set up autopay for the entire balance due?

It solves this problem, gives you one less thing to worry about, and saves you the stamp.

Setting up a lazy-man system saves you from trying to be careful.

 

[Meadbh]

I do not have a checking account with the credit card institution, so the autopay idea would not work. If I did have autopay, I would need to maintain a large cash balance in my checking account due to the variability of credit card bills from month to month. I do all my financial transactions online, so no stamps are involved. I made a visual processing error between 1 and 7, that's all. Having bills on autopay does not remove the need to be careful. You still need to check for inappropriate charges.

 

[mickeyd]

I made a visual processing error between 1 and 7, that's all.

If you have a good payment record, why not give the folks at your CC a call and send them a check for the shortage. It was obviously a simple error that a good customer made and is ready to immediately rectify. I'll bet it is a common error, as I have almost done that a few times myself.

Ask for a supervisor if you run into a brick wall.

 

[Meadbh]

If you have a good payment record, why not give the folks at your CC a call and send them a check for the shortage. It was obviously a simple error that a good customer made and is ready to immediately rectify. I'll bet it is a common error, as I have almost done that a few times myself.

Ask for a supervisor if you run into a brick wall.

The agent I spoke with on the phone recognized that this was an inadvertent typo, acknowledged that I am a good customer, and immediately agreed to reverse the charge. No brick walls were encountered, thankfully. I also paid the new bill in full immediately (the due date is a few weeks away) to ensure that I have a positive balance.

 

[braumeister]

I do not have a checking account with the credit card institution, so the autopay idea would not work

You might want to check on that.

All my credit cards are on autopay for the full monthly balance, and the money comes from a different institution in every case but one.

All I have to do is make sure there is enough in the applicable checking account a couple of days before the credit card is due to be autopaid.

 

[Live And Learn]

Meadbh, you are so right ! Its SO easy to have fat fingers or have a typo. I don't like have company's "pull" money from my accounts (since they would also pull billing erros) so I push automated payements every month. I try and set up my payments a week or two in advance and then I double check, but I'm sure one of these days I'll mess up also !

 

[Meadbh]

Meadbh, you are so right ! Its SO easy to have fat fingers or have a typo. I don't like have company's "pull" money from my accounts (since they would also pull billing erros) so I push automated payements every month. I try and set up my payments a week or two in advance and then I double check, but I'm sure one of these days I'll mess up also !

Exactly!

 

[JOHNNIE36]

I've had this very thing happen a few times and also missed a due date a couple times. A phone call to the credit card companies solved the problems right on the spot. Most of the time those companies were willing to take payment immediately out of my checking account which guarantees payment that very day. Most companies will work with their "valued customers". Don't know why I am so valuable as they never make a dime of interest off me.

 

[Dave_S]

I've had this very thing happen a few times and also missed a due date a couple times. A phone call to the credit card companies solved the problems right on the spot. Most of the time those companies were willing to take payment immediately out of my checking account which guarantees payment that very day. Most companies will work with their "valued customers". Don't know why I am so valuable as they never make a dime of interest off me.

All of the retailers you buy from pay 2-3% whether you pay any interest or not.

 

[scrabbler1]

Well, I screwed up. I made a typo and paid $1117 instead of $1177 on a credit card bill. My next bill shows $24 in interest charges, 12 days later. It turns out that interest is being charged on the entire bill, not just the $60 difference between what I paid and should have paid. The financial institution has agreed to reverse the interest charge as I am a longstanding customer, but it just goes to show how careful you have to be to avoid getting gouged.

What kind of a weird-ass card agreement do you have that allows the credit card issuer to change interest on money which was paid on time? Is this standard practice in the credit card industry now?

The last time I accidentally paid an amount less than the amount due was mroe than 20 years ago. But when that happened I was charged interest only on the unpaid portion, as I expected.

 

[rbmrtn]

I think the way it works is if you are late or pay partial, they go back and accrue interest on each purchase from the time of purchase and is done daily for the statement period. So if you make a partial payment the next bill is new charges + interest on previous balance - payments.

How Credit Card Interest Is Calculated? Here's The Truth

 

[Original Wally]

I allow VERY FEW people access to my account. I prefer to SEND money rather then let someone TAKE money. A bit more work, but then I am retired.

 

[Texas Proud]

Meadbh, you are so right ! Its SO easy to have fat fingers or have a typo. I don't like have company's "pull" money from my accounts (since they would also pull billing erros) so I push automated payements every month. I try and set up my payments a week or two in advance and then I double check, but I'm sure one of these days I'll mess up also !

+2 Big time....


I have done an electronic check for a university, but did not set up any kind of automatic payment....

 

[Texas Proud]

I did the same with an even smaller amount... it about the same money, but the last digit was an 8 and I saw it on my screen as a 6... so I was only $2 off....


My eyesight is not good and I do not like bifocals even though I should use them.... it is funny since I had them for many years when I was young...

 

[RunningBum]

Cut n paste works well in those cases. I have my CC and checking at PenFed and use the option "Pay statement balance" to make sure I get the right amount.

 

[AndrewJackson]

I recently signed up for a priceline rewards visa credit card for the sole purpose of getting 2% cash back. I had been very hesitant, as I hate debt and especially credit cards. Anyway, I went with the decision and set everything to autopay with my chase checking.

 

[Rustward]

Wouldn't it be easier if you just set up autopay for the entire balance due?

It solves this problem, gives you one less thing to worry about, and saves you the stamp.

Setting up a lazy-man system saves you from trying to be careful.

Not a bad strategy as long as you audit every transaction on every statement ... and you maintain an awareness of your running balance at all times and have enough cash in your payment account to cover it. FWIW, this is what I do. Quicken makes it pretty easy.

 

[JOHNNIE36]

All of the retailers you buy from pay 2-3% whether you pay any interest or not.

Dave, I don't understand your post. I'm not dealing with the retailer, I'm dealing with the credit card company. What is your point?

 

[Meadbh]

What Dave is saying is that the retailers actually pay the credit card companies a small percentage of the price of the items sold. In North America where the use of credit cards is ubiquitous, this charge hidden from the consumer and is part of the cost of goods sold. But in other parts of the world where credit card payments are not the default, retailers will frequently base the price on cash purchase and charge the customer extra to use a credit card. I have experienced this in continental Europe, Mexico and in South America, albeit some years ago.

 

[pb4uski]

Wouldn't it be easier if you just set up autopay for the entire balance due?

It solves this problem, gives you one less thing to worry about, and saves you the stamp.

Setting up a lazy-man system saves you from trying to be careful.

Not a bad strategy as long as you audit every transaction on every statement ... and you maintain an awareness of your running balance at all times and have enough cash in your payment account to cover it. FWIW, this is what I do. Quicken makes it pretty easy.

+1 On Jan 1, 2012, I set up all of my bills on auto-pay. I still get to review bills/statements before they are paid like I did before and can object to any suspicious charges. In reality, I do it each time I import my transactions into Quicken and accept each transaction. I do this every few days so the transactions are pretty fresh in my mind.

I also have each bill set up in Quicken as a bill with the normal monthly amount (estimated for bills that vary from month to month like credit card bills). My home screen on Quicken shows a graph of the projected balance in the checking account that I use to pay bills for the next 90 days so I can at a glance see if I need to make an additional transfer from savings (beyond my monthly automatic transfer).

I've been doing this now for 16 months. I've never had a problem, it works like a charm, I don't need to worry about bills not being paid on time or the wrong amount being paid (like what happened to the OP).

I was skeptical at first since I liked having "control" over payments and had for years paid (pushed) bills electronically. My daughter has done this for years and suggested it - I can honestly say it has been one of the best things I have done - makes life much easier.

 

[retire@40]

Not a bad strategy as long as you audit every transaction on every statement ... and you maintain an awareness of your running balance at all times and have enough cash in your payment account to cover it. FWIW, this is what I do. Quicken makes it pretty easy.

I do and assume any logical personal would.

When I get my credit card statements, I check each item and attach all credit card receipts to that statement as supporting proof.

I also post each item in QuickBooks to keep track of my YTD spending as compared to my personal budget.

The credit card statement says, "On [future date] $XXXX.XX will be auto deducted from your bank account." I record that amount in my checkbook register to keep an accurate running balance (which I also post in QuickBooks to offset the charges) and I am done.

IOW, I run my personal finances like a business.

 

[retire@40]

I do not have a checking account with the credit card institution, so the autopay idea would not work. If I did have autopay, I would need to maintain a large cash balance in my checking account due to the variability of credit card bills from month to month. I do all my financial transactions online, so no stamps are involved. I made a visual processing error between 1 and 7, that's all. Having bills on autopay does not remove the need to be careful. You still need to check for inappropriate charges.

I don't understand the comment that you "do not have a checking account with the credit card institution, so the autopay would not work."

How do you pay the credit card balance? Use that account for autopay.

Also, I do not understand the comment "I would need to maintain a large cash balance in my checking account due to the variability of credit card bills from month to month."

Don't you pay the full balance on your credit card each month anyway? If so, you do maintain a large enough balance to cover those payments. You know by the credit card statement weeks in advance what the autopay amount will be, so it's not like it would be a surprise on the day the amount is autodeducted.

Checking appropriate charges has nothing to do with making sure you make the correct monthly payment. These are mutually exclusive items. You ALWAYS check each line item charge regardless of how you pay the bill. So having autopay DOES remove the need to be careful about paying the correct amount.

I have been doing autopay on credit card invoices, utilities, etc for over a decade for both myself and for my business and NEVER had a problem.

I hope these comments and suggestions help you and others run your financial life more efficiently and with less stress.

 

[Bestwifeever]

Well, I screwed up. I made a typo and paid $1117 instead of $1177 on a credit card bill. My next bill shows $24 in interest charges, 12 days later. It turns out that interest is being charged on the entire bill, not just the $60 difference between what I paid and should have paid. The financial institution has agreed to reverse the interest charge as I am a longstanding customer, but it just goes to show how careful you have to be to avoid getting gouged.

I did the same thing a few years ago, but my error was in the cents column. I was only 14 cents short, which meant my next statement included interest like yours on the whole previous balance. Like you, I called Visa and immediately got credited for the 14 cents with the intetest waived. I haven't done it again!

I don't use autopay on anything.

 

[GalaxyBoy]

I did this once. I also recently discovered that with Schwab one can set up autopay for the total amount due for variable bills, such as credit cards. Wish I had figured that out sooner.