Wow, I never thought credit card companies could become sneakier than before. I had two credit card “issues” within the same month that were eye-opening.
Today, I want to review these two incidents and give you a fair warning about the current situation. The incoming recession will see consumers cutting back on spending, but credit card companies still need to get theirs.
They will try everything under the sun to keep you trapped in their financial web of deceit. After the two incidents, I will discuss some best practices for staying on top of your credit cards.
The first incident. When I traveled across the United States on my Passive Income Road Trip, I used my credit card to receive points. Now, it is time to pay back this borrowed money.
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On September 1st, 2022, I made a $200 credit card payment, which was more than the $40 minimum. However, I kept receiving warnings that I still owed a payment.
I checked my bank account to ensure they withdrew the money, which they did. I didn’t think much about these warnings, so I disregarded them.
When I went to pay my bill in October, I saw a nice, fat late fee. It turns out my billing cycle started on September 2nd. Although I had made a payment five times the minimum on September 1st, it didn’t qualify for a September payment.
Of course, I was furious, but I let it teach me a lesson. I didn’t call to complain; I just let the pain of this moment make me a wiser man.
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As you can see, I already made a payment in August. When I paid on September 1st, it still registered as another August payment. These are some of the most underhanded, dirty tactics I have seen in the financial world.
The second incident. After my surprising late fee, I wanted to pay this card off immediately. I believe I owed about $912 at the time, so I made a payment for $920 on September 30th.
I knew this wouldn’t be a payment for October, but I didn’t want to wait three days to make the payment. When you have the cash, make the payment.
I made the payment and waited a few days to check how much I still owed. As you can see, they still give me my interest charge on October 2nd.
40-Year Interest-Only Mortgage
When I logged in around October 5th, I owed $0.18, with a minimum payment of $0.18 due on October 20th. I paid the 18 cents and still can’t believe the brazen disrespect they give to hard-working consumers that are current on their bills.
If I had not kept checking my account, I would have received a late fee for that $0.18. Can you imagine paying $920 but receiving a $29 late charge for $0.18? This is an egregious abuse of power, so we must be careful.
Best practices for the average person. Check your account every week until you have a zero balance for over a couple of months. In fact, always check your account every week.
Sometimes these cards charge you an annual fee, but they never tell you via email. They want you to forget about the expense and rack up late fees.
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I never received an email about the late fee. I did receive warnings about not paying my bill; however, I remember paying it. It was a technicality that I didn’t settle on September 2nd.
The danger in credit cards. As you can see, they took me for the ride of my life in this one month. I hardly use my card, and this was because of my road trip.
However, they treated me like I had been delinquent for years and years. We must be careful when dealing with these credit card companies—they have no loyalty to us.
Their only intention is to make as much money as possible. They love using compound interest against us, which is our fault if we cannot control our spending.
However, they use shady tactics to get even more money from us. What if I had received a late fee of $29 for not paying my $0.18?
Happy Cash Flow Retirement 8
If I hadn’t checked my account for a few months, they would have screwed me over royally. That’s why I say avoid credit cards, even if you think you are a good steward of them.
Using credit cards 101. I wrote the Using Credit Cards 101 series (Beginner, Intermediate, Advanced, Expert) to assist you in learning about credit cards.
I have already had my horror stories about using and abusing these cards, and hopefully, you can learn from my lessons.
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Ten years ago, I wouldn’t have caught these little details, and the credit card companies would have continued to leverage compounding interest against me.
Conclusion. It pays to watch your accounts like a hawk. Not only will you prevent fraud, but you can watch how these companies maneuver.
If you think these companies operate in good faith, you are wrong. These examples are a perfect time to learn about the dangers of credit cards.
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They are out to get you and keep you from paying off their cards. This is not a game. I was in a position to pay off my card on demand; I was just waiting for the government travel settlement check.
However, adding $29 to my tab would have been detrimental if I didn’t have the money. This essentially added another month of minimum payments to my bill.
Please avoid credit cards as best as possible. When using them, watch your account like a hawk. They will not even let you prepay your bill without penalty. Be careful because it’s your livelihood at stake, not theirs. Good Luck!
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