The Checkout

Credit Card Bills Due Faster Than You Think

I got my credit-card bill last week and was about to toss it on my pile of bills-to-pay. But for some mysterious reason, I happened to glance at the due date. Normally I don't know exactly when my bills are due. There's one exception: My Visa card from Chase -- and that's only because it's been due the 30th of every month for as long as I can remember.

So I was stunned when I saw a new due date: the 25th, just 20 days after the current billing period closed. I went back and checked my old statements and sure enough I used to get a 25-day grace period to pay my bill (which in reality was considerably less by the time I received it in the mail). But that time period had shrunk by five days--and considering that the mail is slower than ever, that means I will, at best, get about 10 days to turn around and send in my check. That's easy to manage--unless I'm out of town. Still, if I didn't realize it, I could have been late in making my payment--and suffer with a late fee and higher interest rate.

I called Chase to see if this was a one-time thing and the customer-service agent sighed and said no. "Believe me, I've told plenty of people here what I've thought about it, too." He said all Chase cards have trimmed the grace period to 20 days because consumers can now pay online or on the phone so there's plenty of opportunity to pay without being rushed.

Curtis Arnold, founder of CardRatings.com, a Web site that tracks credit cards, said credit-card companies have been steadily shrinking their grace periods for the past few years, with several moving to 20 days last year. Chase is just joining that group, he said. Discover and Capital One still have 25-day- grace periods, he added.

Here's what Chase spokeswoman Jessica Iben said about the grace period: "It's important to remember that a credit card is unsecured, meaning that the consumer is not required to post collateral to back it up. In other words, we extend credit to people based on their profile of financial responsibility rather than on their actual assets. In short, the only security we have in our loan is the customer's promise and his or her ongoing ability to repay the loan. We work hard to acquire and retain our customers and want to offer the most competitive products. We believe this is in line with our competition."

For consumers, however, this trend can mean deep financial trouble if they don't realize the new due date and pay late. That could trigger not only a late fee -- running about $39 now -- but also higher interest rates, perhaps double what they're now paying.

"The credit card companies are counting on you to not pay attention and get caught" by the change, said Arnold, who's now paying his credit-card bill online. "You don't have to worry about the U.S. Postal Service."

A good idea. But in the meantime, read your bills carefully so you don't get caught in the incredible shrinking grace period trap.

By  |  May 17, 2006; 6:00 AM ET Consumer Tips
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Comments

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I get my credit card statements online only. I am very good about keeping up with my payments. The credit card companies email me after my statement posts. Shortly after, I view the statement then schedule payment based on the due date via my checking account's online bill pay. This method has worked for me for years. I haven't been late on a payment.

A year or two ago, Discover Card shortened the grace period from 25 to 20 days for all customers. They sent me a notice in the mail beforehand. The due date changed, not the statement close date. I called and they switched my account back to the old due date.

Posted by: ProfessorB | May 17, 2006 7:55 AM

For some time now, our credit cards bills have been due just 14 days after we receive them in the mail. One problem this poses is if you are on vacation or have an extended business trip.

Bank of America send an email around the time their bill is mailed out. Then, I pay on-line at my credit union.

Posted by: Bartolo | May 17, 2006 8:21 AM

Chase has in fact shortened the bill cycle by 5 days, but it does a very good job sending e-mail alerts for due dates and confirmations for posted payments.

Posted by: 20850 | May 17, 2006 8:50 AM

Like ProfessorB, I pay all of our household bills and even business bills online. When the bills come in, they get scheduled for payment and we don't have to worry about writing the check or even postage. I always specify the payment date to be 2-3 days in advance of the bill's due date just in case something causes a delay.

Posted by: ABH | May 17, 2006 8:51 AM

Last year my Chase bill arrived in the mail on the first day of my two week vacation. I paid it the day I returned from vacation, but was still charged interest and a late fee because the entire 20 days from the time the bill was produced to when the check was received had passed.

I closed my Chase card account as a protest.

Posted by: Matt M | May 17, 2006 9:01 AM

Matt M has the right approach. If you stick with the card after the shorten the grace period, they'll continue to do it. Search out a card that has a reasonable grace period, and transfer your balances.

Eventually the credit card cos. will figure it out. If they shorten the grace period too much, a large part of the value of the cards will disappear. If you have to pay right away, why not just use a debit card, or pay by check or cash, except for purchases you need to pay for over longer time?

Posted by: AH | May 17, 2006 9:05 AM

I like to pay my credit card through the credit card (Chase's) automatic debit service. Then if there is a delay they accept it as their fault-- no fee! This happened once when they had to change my account number after my wallet was stolen. They didn't transfer the automatic payment, but when I called to point this out they reversed all finance charges and late fees.

Posted by: Ms L | May 17, 2006 9:06 AM

I guess we're all slowly, steadily being wired into the Matrix, huh? Gotta pay them bills online now, huh? I sometimes fantasize about how I might go about minimizing my paper trail, now that Big Brother is tracking my calls, my library habits, and soon, my every purchase and internet action. It's going to be incredibly tough to do so, but it's looking more and more like it's time to go analogue in the digital world.

Posted by: Gene | May 17, 2006 9:07 AM

I schedule recurring payment on my credit card bills through my online bank to occur every month a few days before the bill is due. Sometimes, knowing that the bill will be paid whether I look at the paper bill or not, I pay less attention than I should. Last month, I barely noticed in time that the bill was due a few days before it was scheduled to be paid by my bank. Seems like moving up the due dates is a new trick to collect fees from those of us who try to beat them by scheduling payment every month.

Posted by: CCW | May 17, 2006 9:13 AM

Caroline, your column is online, your readers are online, so are your credit card bills. You argue that it shortened from 25 to 20 days. When you factor in the time it take for your payment to get through the mail system vs. paying your bill online, you may come out ahead if you make an e-payment.

Posted by: Anonymous | May 17, 2006 9:17 AM

I guess my not great memory is an asset here. I have no idea what the usual due dates of my cards are. When I get the bill, I open it, write the due date on the outside, and put them in the stack next to the computer (ordered with the next due bill first). Then once a week or so at night I go through them and schedule the payments on-line. The few times I've been late because I slipped up I called the card company and said that they really shouldn't charge me the late fee because I'm such a good customer. They almost always tell me it's my fault, I shouldn't be late, and then back the late fee out anyway.

Posted by: k | May 17, 2006 9:21 AM

Here's a suggestion, enter the 21st century and have them e-mail your bills and be done with it. e-mail isn't slower than ever, and as soon as you get the statement you can schedule the payment for some date in the future right before the due date and not worry about it.

Posted by: Andre | May 17, 2006 9:22 AM

"But in the meantime, read your bills carefully so you don't get caught in the incredible shrinking grace period trap."

No, read your bills carefully BECAUSE YOU ARE AN ADULT AND IT IS YOUR RESPONSIBILITY.

Geeze, blame the companies for your "about to toss it on my pile of bills-to-pay." Come on, how hard is it to do the following:

1) Get the mail (you already do that)
2) Sort out the bills (you already do that)
3) Open the envelope (5 seconds)
4) Find the due date (5-10 seconds)
5) Write the due date on the outside of the envelope (5 seconds if that much).
6) Toss on the pile of bills to pay (you already do that).

Posted by: Non debtor | May 17, 2006 9:25 AM

While the spokesperson from Chase may be right that the grace period is in line with the competition, she doesn't really address the issue--which is that there is very little time between when your bill arrives and when you have to pay it.

At some point the credit card companies are going to shoot themselves in the foot over this--if they shorten the period any more, so many people are going to get hit with late fees that there will be a revolt against credit card use in general.

Yes, paying online gives you more time than if you pay via mail. But there are millions of people with no online access, and there is certainly still a generation out there that doesn't feel comfortable giving up all their bank information online in order to pay their bills electronically, and the fairly regular reports we read of consumer databases being hacked supports the fear to some extent. (I personally do my bills online, but I understand where the fear comes from, especially when the phrase "identity theft" is in our faces constantly these days.)

Justin McHenry
Research Director
IndexCreditCards.com

Posted by: Justin McHenry | May 17, 2006 9:27 AM

The payment date of my Chase card is a moving target. Yes, it first shortened by 5 days, and then it shortened by 2. Twice, I have had to pay late fees, because I was one day late - my first ever late payments (I am 51 yo). Methinks this is why they are doing this. They are very clever. It has likely made them millions. Legal yes - ethical no. Scumbags, yes.

Posted by: Rick | May 17, 2006 9:30 AM

I agree with the main premise of the story and have often read your entries, but will no longer due so as a result of the sloppy writing/reporting encapsulated in the following phrase: "...considering that the mail is slower than ever..." I am an industrial engineer for the postal service. Your comment is not rooted in fact and is accompanied with no analysis whatsoever. It shows that you have no idea how the USPS has changed operations over the past 10+ years, nor do you have any idea as to the service score trends. There very well could be an issue with your specific ZIP Code, but the WP is a national paper. I would suggest a tour of your nearby processing and distribution center. It's easy to bash the USPS and you know that - few will call you on it. The one class of mail, however, that has decreased steadily over the past decade is Periodicals (you're reading this online rather than holding a newspaper, correct?), so it's not surprising that newspapers rarely say anything postal that is positive, given that Standard Mail competes with Periodicals when it comes to advertising dollars. Alas, the public has more important things to worry about these days, but this was very sloppy reporting.

Posted by: Postal Industrial Engineer | May 17, 2006 9:52 AM

This is not a complaint about Chase, but I've been extremely annoyed by the fact that the card I use most (GM Card Mastercard), long with a 20 day grace, is clearly NOT mailing the statements on the statement date. If I wait until I receive the statement to pay, it will almost certainly be late. I put up with this only because it's a painless way to get a leg up when it comes time to buy a new car ($2200 last time).

Posted by: Dick | May 17, 2006 10:03 AM

I agree with the engineer that the postal service is actually faster than it was 10 years ago. Possibly due to less first class mail per person? Another thing the article missed. Not only do the companies shorten your billing cycle, they also arbitrarily change your bill date sometimes so you make a late payment. I have a budget book with the due dates of all my bills so I notice if I don't get one on time but I don't notice if I get one early. I can show a record of the many bill date changes of some of my cards, most notably MBNA - which I finally cancelled because of this bait and switch that cost me many late fees.

Posted by: Dat | May 17, 2006 10:03 AM

Postal Engineer: It's "do so," not "due so."

Posted by: FYI | May 17, 2006 10:06 AM

Why is it called a "grace period" anyway? To me that implies a time after your due date but before you get charged a fee (ha! like that happens). Anyway, with shorter due dates, doesn't that mean more billing cycles per year? And more chances to collect interest and fees?

Posted by: anonymous | May 17, 2006 10:06 AM

I allow most companies to debit my checking account, including credit card companies. The bill comes, I check to make sure there are no errors and then I file the paper. The bill is automatically paid on the due date even if I'm on vacation or in a coma. I started out paying my bills on-line, but found that a completely automated approach worked better. I only interact with the company if the bill is in error (which it rarely is).

Posted by: Jim | May 17, 2006 10:13 AM

I have difficulty with the credit card company claiming they are concerned with the financial strength of their customers for this unsecured loan. After 15 years of professional work, I went back to school full time. In the first month of my student status I received more applications for credit cards than I had during all my working years. I question the integrity of the claims and approaches of these companies.

As they note, computers allow us to have flexibility. Perhaps they could retain the existing 25 day pay periods (still significantly shorter than the traditional net 30 by the time you get the bill) for those of us who have paid responsibly for years.

Posted by: Professional | May 17, 2006 10:18 AM

Boy, do I feel ashamed to be associated as one of your readers, Ms.Mayer. What fools!

This isn't about the time required to pay a bill. The shortening of the grace period is all about their hopes that more people will miss the due date so the credit card companies can rake more in off late fees and interest rates.

Most bill payers traditionally attend to their bills once-a-month. That's how all other companies, utilities and mortgages operate.

But, credit card companies just need another way to screw those who pay-off their card every month...I mean, 20-days.

...and readers like yours accept this as ok and your fault. Sad!

Posted by: routhless | May 17, 2006 10:21 AM

Wow i can't believe there are so my shills here for the credit card industry.

I also love how the credit card rep said the debt is "unsecured", yet they pushed a new bankruptcy law to make you continue paying after bankrupty. That seems like they are making it secured, doesn't it?

Posted by: creditcardcompaniesareevil | May 17, 2006 10:30 AM

About 1 1/2 years ago I had a really bad experience with another bank. On the heels of that Chase shifted the due date on my Visa credit card from the 22nd to the 15th. My routine at the time was to mail bills on the 15th and the 30th. It got me. I managed to sweet talk my way out of the late fee and interest charge. I stopped using the card, waited a month, then closed the account in protest and got a Visa card with a bank that I trust. I havn't had problems since.

Will.

Posted by: Will | May 17, 2006 10:39 AM

I have a very easy solution to this. I have set up my bill-pay to automatically pay each of my credit cards an X number of dollars each month. I have made sure this is always more than the minimum payment. I usually pay a good chunk of my purchases each month and very rarely carry a balance on more than 1 card, but this method allows me to make sure I don't get hit with late fees and nothing goes on my credit report.

Posted by: SS | May 17, 2006 10:40 AM

I had the exact same experience with Chase. I have two credit cards with them (one because it has been bought out four times). When they renewed both of them they surreptiously changed them from Platinum to basic. On the MasterCard, they migrated the due date up from the 18th to as early as the 6th over the course of 13 months. Everytime shave a few days off. More annoying than the fewer grace days was the fact that the date was different every month.

Finally, when I received my bill 5 days before the due date, I called to tear them a new one. Turns out it is my fault. Yes, I am one of those "deadbeats" who pays their balance in full every month. Quote: "Well, depending when in your billing period you charge something, you could have up to 40 days before you have to pay. That is an interest free loan. You are really taking advantage of us."

Yup, I am truly exploiting them. I feel sooo guilty.

Awwwwww....the poor little scum-sucking pigs.

Posted by: RB | May 17, 2006 10:51 AM

Hey "Creditcardsareevil", if you don't like them, don't use them. If you don't use them, why do you care about the grace period?

And people, remember - it's a grace period. This is a period of time between the bill date and the due date. It's free use of their money to you. Would the credit card companies be a big evil boogieman if they sent the bills "due upon receipt"? Many businesses do that. If you don't like it, move on.

Posted by: Non debtor | May 17, 2006 10:53 AM

Because you are all on your computers, you assume everyone can do their bills online. There are still a large number of people w/o computers or internet access who are affected by this policy. As a D.C. resident, I can tell you that the option of going to a public library and waiting in line to pay online is not an attractive one. On another note, I agree with the post above about calling about and/or cancelling a credit card if the services are not up to par. I have had fees waived before by threatening to cancel a card. If you are good with your payments, the companies most likely want to keep your business.

Posted by: Chris | May 17, 2006 10:53 AM

Yes I agree they are just trying to see if they can catch people, I have heard that the credit card companies make more of their money off late fees and other penalties than anything else.

Here is a sort of related experience I ran into with one of my cards -

I got this card more or less as a back-up to the other card I have and use all the time. I've had it for years. Some years ago they did the "moving date" thing to me and I incurred a $50 late fee, I got mad at them and stopped using the card except for emergencies. But I kept it all the same, with no balance. I'm sure they love that...

Anyway once they mailed me a promotion saying they would give me $20 toward any purchase made before a certain date. I thought, cool, and used the card to make a tsunami donation. Then watched very carefully for my mail.

Sure enough when the bill came, the due date was so soon that I had to mail the payment in THAT DAY or I would have been late! I ran it right to the post office and beat the deadline.

Those sleazebags. They know what they are doing and so do I!

Posted by: Catherine | May 17, 2006 10:54 AM

I use AMEX because I have to pay the balance in full every month and it keeps me on a budget (plus the Rewards points are great!). I get an email notification about 4-5 days after the statement closing date, and the "due date" is usually at least 10 days BEFORE the next statement closing date. However, I called in outrage when they started backing up the "due date" and learned that as long as they receive payment by 2:00 PM on the statement closing date, it's not considered late. So really, I do have a 22-25 day "grace period" but the card companies will never, ever tell you that unless you ask! They back up the due dates to get their $$ from you faster, but sometimes they're not as set in stone as you might believe. It's worth a phone call to check.

Posted by: Fairfax222030 | May 17, 2006 10:56 AM

To "Non debtor" - the difference with credit card companies is that they are not a lending company that receives nothing from lenders when nonpayment occurs. Credit card companies are receiving a percentage of every purchase made, so they should be more amenable to mollifying the customers. Why tee off customers more just to make an ocassional late fee? This is why people are using debit cards more and more...

Posted by: Chris | May 17, 2006 10:59 AM

People should know how much they'll have to pay before they even get them. Seriously, you should be tracking expenses and not wait for the suprise bill in the mail. Then look at hte due date and pay it. People shouldn't be using their credit cards for things they can't afford anyway (barring a real emergency), so they should have the $$ to pay the bill when they get it. Then its not late and its no problem.

Oh, and I have gotten the bank to cancel fees for the one vacation gaffe - or, since i usually know what the bill should be, just pay it before you leave even if you haven't gotten the bill.

Posted by: CW in DC | May 17, 2006 11:04 AM

Paying your bills on-line is a great idea-but be sure you carefully check the payment before you hit send. Last week I checked my bank balance online to find that it was overdrawn by over $15000...the reason? I forgot to put in the decimal when I posted a $161.00 payment-so it took the payment as $16000! The folks who helped me straighten it out were NOT the credit card people (MBNA-I WILL cancel as soon as my balance is gone) but my bank-USBank was awesome...didn't even charge me any fees. This experience has made me a little leary of online bill paying for now...

Posted by: Betsy | May 17, 2006 11:11 AM

I have a Chase card which I always pay online the same date every month. I do not receive a paper statement. About six months in to a zero interest promotion I was supposed to have for over a year, Chase did the same thing to me. One day I logged in to pay my bill online and I saw the due date had passed five days ago. The result of course was a late fee, but I also lost the interest promotion and my interest went from 0 to a much higher amount. Multiple calls to customer service have resulted in a promise to restore the 0 percent rate, but of course the interest is stil charged on my balance each month. Chase may have decided that this grace period change would bring them an upfront windfall in late payments and higher rates, and they may be right. But I also know that Chase has lost a customer permanently.

Posted by: Jason | May 17, 2006 11:12 AM

Chase pulled a "bait and switch" on me with a pre-approved 0% offer for one year. Four months later, with no notice, I was surprised by a bill showing 16.99% interest on my balance. Never paid late to ANY credit card, ever. When I protested, they said that something must have changed on my credit report. I transferred my balance immediately to a trusted company and closed my Chase account. I let them know they lost me as a customer forever. Something has happened at that company lately and gouging the customers in any and every possible way is apparently part of their mission statement. The due date changes is just another example of their unethical dealings.

Posted by: Deb | May 17, 2006 11:37 AM

Postal Industrial Engineer wrote: I would suggest a tour of your nearby processing and distribution center.

Bet that one is fun for the kids! Switch to decaf and stop sending me junk mail for people who moved out of my house 10 years ago.

Posted by: Anonymous | May 17, 2006 11:45 AM

RB seems to be the only one who really sees what's going on here...the banks are probably dancing for joy that we're outraged. They LOATH having educated consumers for customers, since we're usually the ones to pay off our balances in full each month.


They HATE US.


I cannot emphasize that enough.

That's why I do all my banking with my credit union. The members are the shareholders/officers, so they treat us right! I even get a check back from my auto insurance if claims were lower than anticipated.

Posted by: The Cosmic Avenger | May 17, 2006 12:19 PM

Yup -- Chase tried that with me two years ago after having a bill that was due on the 20th for 2.5 years.

Chase lost me as a client that day. And they will never get me back.

Posted by: AJ | May 17, 2006 12:20 PM

With my Visa card, the grace period didn't change, but the due date did change a number of times.

I would pay my bill early, as soon as I got it. They responded by changing the bill mailing date and the due date earlier and earlier in the month.

Posted by: John Johnson | May 17, 2006 12:20 PM

I haven't paid a credit card bill with a handwritten check in probably 18 months. I didn't know people still did. Yes, mailing a check is a problem, please stop doing that.

Posted by: Don | May 17, 2006 12:21 PM

MBNA shortened my grace period as well, and that really matters to me as I pay off my credit card every month. It takes them 10 days to get the bill to me, and I like to make sure I have a week to get it back to them. That gives me a window of a few days.

Like Cosmic Avenger, I have switched to a credit card issued by my credit union. I may at some point write MBNA and say that the shortened grace period caused me to switch credit cards.

I hate the credit companies too!

Posted by: Sue | May 17, 2006 12:42 PM

I am a fairly recent college grad, and I keep a spreadsheet of every bill, the date it's due, the amount, and the date/amount paid. Of all the bills I pay (utilities, student loans, credit card), only two have kept the same due date in the two years I've been keeping track. I still pay by check because I prefer to know exactly how much I'm paying and when. It's frustrating, though, especially on a tight budget, to pay all bills in full when the dates keep changing.

Posted by: C | May 17, 2006 12:43 PM

the comment by the spokesperson about the grace period being based on financial repayment history is a load. the amount of your credit limit is what is based on your history. the grace period is just a way for them to get more money and reap the interest on our money.

what will upset me is they will say that the payment was late when it will be on your statement as "payment-thank you".

we will be charged the late fee.

Posted by: jeffsmith | May 17, 2006 12:53 PM

Why don't writers like you and the media in general point out that this hidden fraud is just part and partial to the bankruptcy legislation brought to us by George Bush and the lunatic right wing nuts who have gotten control of the Republican Party. Every bit of this legislation can be rolled back instantly by the Democrats once we are rid of Bush and his banking industry and investor cronies. Instead of merely wringing our hands over this stuff, we need to get angry, and I mean furious, and talk to neighbors and people at church, even in grocery store checkout lines, and hold the Democrats feet to the fire to ensure that this stuff is rolled back. The only way we can restore sanity to this country is to dump every program, every appointee, every judge, from the Bush Whitehouse. Investigate those "lost" papers of Justice Roberts and throw him out. We need fewer nuts and "visionaries" and more people with common sense, a little integrity and love of this country.

Posted by: Mike Brooks | May 17, 2006 12:54 PM

Hmm, just checked my Chase account and the due date is what it's always been. I set up an alert to email me 5 days before it's due so if/when they do change it, I won't miss it. (I'm glad I read about that option here, I never looked for it before.) I started to set up an automatic payment, but if I do that, I'll never review what the charges are, so I changed my mind.

Thanks, Caroline, for this article and the blog!

Posted by: Pat | May 17, 2006 12:57 PM

Not only do the due dates shift on many credit cards, they also have a strong inclination to be set on Sundays--shaving yet more time off the possibility of using the U.S. mail option.

Posted by: Will in Richmond | May 17, 2006 1:14 PM

I pay online like many of you. My pet peeve is due dates on weekends and holidays. This should be outlawed, as it shaves more days off the grace period. I may move to all my accounts being paid automatically.

Posted by: Steve | May 17, 2006 1:19 PM

This comes as absolutely no suprise whatsoever; Chase is almost as disgusting as MBNA in its business practices. Two months ago they raised my 5.99% rate to 29.99% because, they said, "my balances were increasing too much and I was a risk." This was a lie; not only had I made major strides toward paying off debt accumulated during a period of unemployment, Chase continued to send me balance transfer checks and offers for NEW credit cards. When I pointed this out to them they said they'd restore the old rate, but this has yet to happen, quelle surprise...

Posted by: creditcardcompaniessuck | May 17, 2006 1:30 PM

Don said: "I haven't paid a credit card bill with a handwritten check in probably 18 months. I didn't know people still did." In other words, Don thought that 18 months ago everyone suddenly stopped writing checks to pay credit-card bills? Come on; get serious! Probably, *most* people pay their credit-card bills that way. Granted, the changing of due dates is a nuisance or worse, but the solution is simple: open the bill when it comes, look at the due date, mail a check a week before the due date, and forget about it. I've done that every month for, maybe, 15 years (the last few of them to Chase), and I've yet to be faced with a late charge. Other clues: don't buy things you can't afford, and pay the whole bill when it's due. Voila! No late charges, no interest payments. If you'll be away (say, on vacation) when the bill might come, call the credit-card company before you leave, and send them a check in advance that will cover the expected bill (they'll tell you at least roughly how much it will be). While you're at it, tell the company where you'll be, so that new charges from far away from your home won't trigger alarms. Those really aren't complicated ideas. And they aren't new, either.

Posted by: jaded | May 17, 2006 1:33 PM

Oh yeah, and some months I pay off part of the balance, then the rest a few days after the due date because of the timing of deposits to my account, and my credit union hasn't charged me interest for that yet. Apparently, they don't consider it "late" until at least 4-5 days after the due date!

Another example of why I have my credit cards, savings, checking, Roth IRA, life insurance, auto insurance, homeowners insurance, and mortgage with my credit union.

Posted by: The Cosmic Avenger | May 17, 2006 1:34 PM

Matt M, though my case wasn't similar to yours, I called up my AmEx card to explain why I couldn't pay up on time and they waived the interest and the late fees for me. I think sometimes, if you call them and talk to them and explain, especially if you have been a good customer to them, they will work with you...

Posted by: Sam | May 17, 2006 2:09 PM

I have read each and every comment, and the article (even the conspiracy nut) and there is truth in everything that was written.

Yes, the banks are trying to make a buck. That is the nature of business...to make money! Like every business.

Banks have 2 agenda:

1) To get everyone in debt; and
2) To keep them in debt.

That is how they make money. They'll do everything they can to ensure you stay in debt. Including lobbing congress to change the laws.

But the one thing they are NOT doing is twisting anyones arm FORCING them to get credit cards.

That is the fault of the individual!

I don't like the banks. Their methods are unethical at best, but they are also not pointing a gun to my head forcing me to sign up for their credit cards and use them.

So, if you are using them, then it is your own fault. If you use the too much that you can't pay them back, then you caused it.

However, there are circumstances which are out of the individuals control. Like downsizing, medical emergencies, disasters, etc that can cause one to go broke.

It is these people that I feel sympathy for. They would love to pay their debts, if they could...And then banks stomp on them, harass them, and even threaten them when they can't.

That is inexcusable!

But, again, if the person was responsible in first place, planned for unexpected occurances and put money away, or invested it wisely, then they might be in that situation.

So, yes, the banks are bad and evil, and quite honestly the product of Satan (read the bible), but it is also the individual's fault as well.

So, if you are in debt, then look for ways to get out of debt that are ethical and legal and don't blame the banks...blame yourself. Don't put up with harassment either or other illegal activities. Just take back control.

Cause in the end, the only thing that you are mad at is you assigned over control to the banks instead of keeping control, right?

Jae Burnham
CEO & Founder of
www.reliable-debt-settlement-options.com

Posted by: www.reliable-debt-settlement-options.com | May 17, 2006 2:31 PM

I got caught in the shrinking grace period trick a little over a year ago. Since there there wasn't enough time left for me to mail the check and have it arrive on time, I went to my Bank of America online account and did an electronic bill payment during the business day. The money was deducted right away from my balance, but it transferred out of my account at just past midnight, so it posted as the day after I did my transaction.

Now over to the credit card company, Chase. The payment was gone from my bank account but not showing up on my credit card account. On the third business day, I called.

Chase told me it was my bank's fault, the money hadn't been transferred. BofA said it was Chase's fault, they had the money but it wasn't posted. Back to Chase and another customer service agent who said well, it didn't matter whether they did or didn't have the money, since they had another day left before they "had" to post it (that's where the midnight transfer came in), so I was going to get hit with the interest and late fees either way.

Since I was a longstanding customer and always pay the full amount, this really peeved me off. IT DIDN'T MATTER WHERE THE MONEY WAS??? What kind of answer is that? It took a three-way conference call between BofA, Chase, and me to get this all straightened out.

After that little circus, I have no intention of paying bills online for a long, long time. And there's no way I'm going to trust any of these companies to automatically debit my account for the payment of a bill, with the way the dates change and the mistakes that appear on the statements. I caught a $150+ double charge just last month.

Posted by: LB | May 17, 2006 2:34 PM

Thank goodness I happened to read this! I have a Chase Visa and I always pay on-line at the first of the month, which would probably be too late this time. I usually don't bother to open the bill until I'm ready to pay it.

Posted by: Martha Gerstein | May 17, 2006 2:44 PM

I got caught out with Chase and they raised my rate to 28%. I had never been late, always paid 2x the req. amount. I promptly transferred the balance and closed the account, and will never, ever do business with them again.

Posted by: asdg | May 17, 2006 2:51 PM

Chase is about as bad as you can get in a credit card. They pulld the same thing most other contributors have said, and asw you note, they bury it in a flood ot promotional literature. If you complain, they bascially tell you to piss off if you don't like it. I have filed consumer complaints with all relevant Better Business Bureaus, with the Delaware Attorney General's Office, and online at e-opinions. I guess with Chase's contributions, we needn't bother their paid puppies on the Hill.

Posted by: Chris Wittmann | May 17, 2006 3:01 PM

I personally don't care as much how long the grace period is as I do about knowing what the due date is. I have several bills that typically has a due date of the last day of the month. It has been that way for years. Two months last year the date was moved up by 5 days. I do pay this bill online and payments were scheduled but of course paid late. This company is online but they do not do e-billing nor do they send emails. I do believe that this is a ploy to get fees and raise interest rates of people who don't normally pay fees. It's ridiculous for credit card companies to do this because in the end they shoot themselves in the foot. They have historically felt safe doing these ridiculous things because the industry as whole would adopt the same practices. Having worked in the credit card industry I know that this will soon be changing. There is a credit card company out there that will be looking to do the right thing instead of falling back on what the rest of the industry does. That will be the differentiator when trying to attract and retain the best customers. Low interest rates and rewards programs alone are no longer a differentiator because everyone has it.

Posted by: KOA | May 17, 2006 3:31 PM

To anonymous: Anyway, with shorter due dates, doesn't that mean more billing cycles per year? And more chances to collect interest and fees? -- NO!!! the issue of the discussionis is shorter due day TIME PERIOD, (ie you have less time to pay your bill from the time the statement is issued); but the statement still comes out once a month and due day is still once a month, duh!

Posted by: Anonymous | May 17, 2006 3:37 PM

TO Chris: "...you assume everyone can do their bills online. There are still a large number of people w/o computers or internet access who are affected by this policy." -- well, you still maintain to be a responsible adult, even without the internet access, don't you? So what is the problem with doing the step-by-step: open mail from cr card cos, cehck the due amount and day, pay the bill, BE HAPPY

Posted by: Anonymous | May 17, 2006 3:44 PM

TO C: "I still pay by check because I prefer to know exactly how much I'm paying and when" --- whe you pay with check you DON'T know when your check will be cashed and balance on bank account will decrease, it's all up to the mailing time, etc. With online payment you know exactly when the bank account will be charged. Wake up!

Posted by: Anonymous | May 17, 2006 3:52 PM

In a matter of few years, the issuing banks for my two credit cards were taken over by Chase. My husband had a very bad experience with Chase long time ago while he was on deployment with the Navy. Even after I heard his story, I kept the credit cards -- 1) for the points/miles, and 2) I think I should have my own bad experience before I cancel out on Chase. So far -- all is well.

I am the online-paying person, but I never do it through the credit card's site, but through Chevy Chase Bank -- they offer you free online payment. You get chance to verify the amount and date of payment BEFORE you hit "schedule payment", you can edit/cancel the payment already scheduled, you can see that it was processed, and sleep tight!

And I check my Chase cards' statements online. Oh, sorry, forgot! Here it comes for those without internet access -- do you have landline phone? you know you can call in those 800 numbers to check your balance, latest transactions, next due date, ... same with any regular bank. What else do you need to know to be on time? That you CANNOT BLAME OTHERS FOR SPENDING MONEY YOU DON'T HAVE FOR THINGS YOU CANNOT AFFORD AND HOPE SOMEDAY YOU CAN FILE FOR BANKRUPTCY SO THOSE OF US WHO ARE RESPONSIBLE THEN SUFFER FROM MORE STRICT RULES AND HIGHER FEES??
So do call those terrible cr card cos every Monday (after long shopping weekend) if that's what it takes for you to be ADULT.

Posted by: Anonymous | May 17, 2006 4:11 PM

To the postal engineer, don't pass the bad post office buck off to "specific zip codes" I've lived in three different zip codes in the last five years, and every single one had attrocious service. Several priority mail packages were misdelivered or lost, and the service was very unfriendly when we tried to have the packages tracked down. One was shipped to Sacramento from LA, and ended up being delivered in Germantown, MD with the USPS shipping label attached!!! If the USPS wasn't another branch of government it would have been gobbled up due to competition long ago.

Posted by: beat gimp | May 17, 2006 4:29 PM

Thanks to LB for your comments -- I've been setting up my online payments to pay out on the due date, but I can see how the actual movement of the $$ might be after midnight and I could get hit with a late fee. Just changed my MBNA payment so as to avoid this possibility.

Yes, we all choose to use credit cards, and CC companies are in business for the money, no problem.

If the CC companies were honest, open, and cooperative, they'd have so many more good customers. Instead, they've taken the greed route and tried to sign up everyone in the family, including the family dog, in an effort to snag as many customers as possible regardless of the creditworthiness of the customer.

What I resent most of all is when I do have to call them about something, they pretty much treat me as though I'm a dead beat lying cheating customer just trying to get out of something. It's not until they look at my payment record and listen to my request that they change their tone.

If the CC companies would make "creditworthiness" something that mattered again, then they would not have to lobby regarding bankruptcy laws, etc.

Posted by: LRH | May 17, 2006 4:47 PM

Non Debtor is the only one who is absoutely correct here. Your credit card payments are due immediately and always have been. All the grace period represents is the reasonable amount of time it takes for the bill to reach you and for your payment to reach the company. They part about the bill sitting around for a few days until you can get to it is completely irrelevant.

What you are supposed to be doing is mailing your payment as soon as you get the bill. That is what you implicitly agree to do in the credit agreement. If you do this, your payment will never be late.

Posted by: BKP | May 17, 2006 5:27 PM

I pay as many bills as possible online. The one problem I've found, somewhat similar to switching due dates, is the unsolicited switching of account numbers.
(Macy's has done this to me twice so far- and I've only had the account there for 18 months! I'll unexpectedly receive a mailing with a 'congratulations, your new card is here' insert when my old one was perfectly fine!)
The problem is, I set up my online account access & auto payment using the old card's numbers. So I'm forced to re-establish a payment link from my bank to the new account, which my bank says can take up to 3-5 days to process. Luckily, I've caught this in time both times, but I'm convinced it's just another credit card company scam to get fine $$.

Posted by: credittricksaplenty | May 17, 2006 5:40 PM

The ONLY reason they do this is to get the late fees when people forget. What a bunch of slimy jerks.

Posted by: What a bunch of jerks | May 17, 2006 5:53 PM

I recently got a platinum visa card from RBC and used it for the first time.
When i opened the bill, i also saw another letter saying RBC is changing the grace period provisions. The bill due date was 22nd and i get the bill on 15th. What kind of grace is this?

Posted by: Sam | May 17, 2006 7:08 PM

Funny coincidence to see this story. Last night about 15 minutes before midnight I remembered that I wanted to pay my credit card bill in advance. I logged on to pay online and discovered that my grace period had been shortened by 5 days and I would be overdue in a quarter of an hour. Luckily I was able to pay and miss the deadline, but I'm not happy with my credit card company right now.

Posted by: Anonymous | May 17, 2006 7:55 PM

As a contrarian view, I've been finding that my due dates (and bill closing dates) are dancing all around the calendar these days, and getting *later* on average. Used to be due on the 5th of the month or thereabouts. I asked them to move to after the 15th to fit my payroll schedule better. I think this caused the billing period to end on/around the 25th of the month. No problem. But now, my billing period closeout has drifted later, to the 1st, 2nd, 3rd or later, and this month my payment wasn't due until the 26th I think.

We're "freeloaders" - run a lot of expenses through to get the rewards, but pay in full each month. Never had a late payment since we pay online. I can only guess that someone is playing around with the dates, snickering at the look of confusion on my face as I open the bill each month and try to figure out when this one is due.

Posted by: CHASEd Around the Calender | May 18, 2006 9:21 AM

On this note, if you are a Washington Mutual bank credit card customer, the good news is they let you make payments online. But if you want the payment to post the same day, they charge you $14.95 for the privilege! This is disgraceful - I am saving them time and money by not asking them to process a paper check and they want me to pay for their automated systems to post a payment just because it is same day service. Look at Citibank - they don't charge you anything - if you make an online payment by a cutoff period (like 2:00 p.m.) on a day, your payment posts the same day - no fees, no hassle.

WAMU - learn something - this is disgraceful.

Posted by: Anonymous | May 18, 2006 11:00 AM

"But if you want the payment to post the same day, they charge you $14.95 for the privilege! This is disgraceful - I am saving them time and money by not asking them to process a paper check and they want me to pay for their automated systems to post a payment just because it is same day service"

But they DON'T charge if you post earlier. It's a "tax" on unorganized people.

Read your customer agreement. Mine says (and this isn't a direct quote since it is at home) that the payment is due upon receipt of the bill. However, they will not charge interest/fees if I pay within the grace period. If you are so disorganized that you are paying on the last day of the GRACE period, maybe the $14.95 kick in the pants will motivate you to better organize.

Posted by: Non debtor | May 18, 2006 11:20 AM

Related to this whole thing... MBNA customers might have noticed a recent mailing with a bunch of fine print. It used to be that MBNA would not raise your interest rate if you are late on a payment. They are changing this. So, if you have a 0% special offer and then are late for any reason, they can up the rate to whatever they'd like. But, you can opt out! You can write them and tell them that you don't want them to do this. I never carry a balance, so I didn't bother, but if you do... Moral of the story, read all those things they send you in the mail closely. They'll tell you about changes to grace periods, interest rates, fees, etc.

One other thing to keep in mind is that getting rid of your credit card may not be a good idea. From a credit perspective, having a card for a long time with a good credit history on it helps you.

Posted by: anonymous | May 18, 2006 11:32 AM

The American consumer is being legally fleeced by financial institutions with the consent of our elected officials. From the new bankruptcy law to the scrapping of usuary laws we are being shafted!

Posted by: John George | May 18, 2006 9:10 PM

My original credit card account with First USA was bought out by Chase about 10-12 months ago. I always had a regular due date of the 9th of the month. Two months ago I noticed that my Chase card due date was earlier than expected. I use my credit union's online BillPay to schedule recurring bills, and had my Chase account set for the 1st of the month which should have given plenty of time for the transfer and posting of payment to occur. I checked my bills for the previous 6 months and saw that Chase was actually billing every 4 weeks instead of monthly (I wasn't concerned with grace period, but with due date.) Since that time I changed the scheduling of payments from payment-in-full monthly (which could range between 4 and 5-1/2 weeks) to half-payments every 2 weeks. This translates to 26 payments (or 13 months) per year rather than 12 payments per year.

Posted by: M.J. | May 19, 2006 12:18 AM

Although I feel sympathy for the shortened grace period I guess I use a novel approach.As I have limited cards I monitor the accounts and pay the bills the day it comes in the mail. By maintaining a simple buffer in my checking account I can pay the few cards and my mortgage online and not risk late fees. If I am not home, I have the accounts registered online and make a fee-free telephone payment. Limit the cards, fewer dates to keep track off and less risk.

Posted by: Richard | May 20, 2006 9:39 PM

My son who was 2 (at the time) got a credit card offer a few years ago. I think the CC companies offer credit to many who can't afford it. So here is a game I play with them. When they send in 0% no interest offer, I take the maximum minus $50. I have the balance transferred to one of 3 cards that I use. Then I call the card company and have them send me a check for the balance, park it in a money market account. It started out as a little way to beat the CC companies at their own game but with the interest rates rising, it nets a $200/mo. I give the money to a local charity and get a tidy little tax deduction in the process.

Posted by: FreeMoney | May 22, 2006 12:41 PM

I also received the zero interest promotion from Chase Visa. One time I paid on line, it came back unable to located bank account. I had been paying all my bills with this bank account for years and could not figure out what went wrong. I went over it with customer service, and they said I had supplied the right number, they didn't know what went wrong. I contacted my bank, and they said no attempt by chase had happened to take the money for this payment. Then another time I paid over the phone using this checking account speaking to a customer service rep, again I get a letter unable to locate account. Then I get a letter that now my interest had gone up to 29 percent. I sent them letter after letter, including letters from my bank stating there is no reason why they could not take this money from my account and that I had been a customer for 8 years. I also sent them a cancelled check from Dell using the same account. They basically said too bad...what is the recourse in this matter??

Posted by: T | May 28, 2006 11:01 PM

They offerd me a 2.99% loan for life from the chase credit card. It's good deal and I took it. Then, I set the automatically monthly payment from my personal internet bank, not from Chase. Don't think I need to worry about it. It's fine for 6 payments after the loan. Suddently, I got into this trap and been charged the late fee. Chase changed the due day without any other information send to their customers except the samll lines in the last statement. It's outrage! Will anyone (a normal person) look at the statement to check the varied due day such as my situation?

Do you think we have a case here!

Posted by: Anonymous | June 13, 2006 1:23 AM

My Chase bill has always been due on the 21st give or take a day. I have some extra expenses this month so was waiting as long as I could to pay online. Last month it was due on the 23th. I was surprized when I looked at my bill to see if I had any time left and see that it was due on the 17th. I am already late. I cancelled my Chase card 8 months ago when I paid online on the 18th of the month one month for a duedate on the 21st and was charged a late fee. They used to have a policy of "date Sent" being totally different than date recorded as being paid. I believe there was or is still pending a class action suit to against them for late payment recording(WHICH I NOTICED HAS CHANGED THEIR PRACTICE OF DOING THIS). They are crooked as they come IMO.

Posted by: Phyllis Jones | June 20, 2006 4:18 AM

Great site. Keep doing.

Posted by: Last | July 15, 2006 11:34 AM

I think there is something shady going on at Chase. They are doing that purposly to trip you up so they can charge you a higher interest rate. There should be a law against that. I found out, I have a floating due date. In February, my due date was on the 7th, in March it became the 5th, April it became the 2nd, then in May, it went up to the 3rd. Seems like that should be against the law or something. My advise. pay off your Chase credit card ASAP and drop them like a bad habit. They are a rip off.

Posted by: Dave B | July 20, 2006 11:59 AM

Chase changed my interest rate from 8% life-of-the-loan to 27%, illegally I am sure, and then said I had to pay it. I argued persistently in email and they backed down, which leads me further to believe the change was illegal. However, what about the MILLIONS of people who didn't argue or who thought they couldn't argue???? What a sleezy operation!

Posted by: kevin | September 21, 2006 9:53 PM

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