Beware of Annual Penalties If You Miss a Credit Card Payment
It seems like credit card companies are always coming up with creative ways to trick their customers. Everyone knows that you have to pay a late payment penalty if you miss a credit card payment, but some credit card companies will also impose an “annual penalty” on you.
In other words, if you miss a payment, the issuer can raise your interest rate significantly. Of course, if you pay with your card in full and on time (and you must), this is not a problem. However, if you have a balance sheet, it can really cost you and discard your debt disposal plan . On the personal finance blog Budgets Are Sexy, writer J. Moni warns of discovering this penalty with his own Amex card:
Stopped in to pay with my AMEX card as I usually do every month (on time) and saw this pearl of notice highlighted on my face as I went to hit the “pay” button:
“If we do not receive your minimum payment by the due date of 08/09/17, you may have to pay a late payment penalty of up to $ 38.00 and your annual interest rate may be increased to an annual penalty rate of $ 29. 99% “.
Umm .. WHAT ?? APR penalty? 29.99% ?? Is this a warning or a threat to your impeccably paid loyal customer for the past 7 consecutive years? I know I never give you any interest payments, but damn I didn’t know it would be like that.
This is another example of how one small mistake can drive you into a downward spiral of debt. So what can you do to combat this? The obvious answer is to make sure you never miss a payment and read the terms and conditions of your credit card. But J.Money gives good advice if you are still mistaken:
if you DO miss and you – because you are human – call them immediately and
plead,turn on your sweetest, sexiest voice and ask them to please give it up for you as you were a repeat customer and plan to give back to them over time more and more of their hard-earned money. If they say no, ask to speak to the manager and then repeat (if the manager says no, hang up and try again!).
We’ve told you how to negotiate with customer service, especially when it comes to annuals. Let them know that you have been a regular paying customer for many years and ask politely for a discount. It doesn’t always work, but it’s worth a try, and if you’ve been given an APR penalty, it’s a must.