Like any irresponsible twentysomething, the first thing I did when I lost my job was stop paying my credit card payment. Yes, I know that late payments are one of the easist way to damage one’s credit, and I know that bad credit can prevent me from getting a car loan or a mortgage.
Well, now that I’m back on the horse, I’ve decided to just pay off the card in one lump payment and cancel that bastard. So I called them up, only to find out that they had tacked on hundreds of dollars in late fees and “over the limit” fees (the card was almost maxed out, but their late fees put it over the limit and then they hit me with fees for that, too!). A card that had once carried almost its $1,000 limit was now up to almost $1500!
So here’s my thing; I know that in cases like this, the companies are almost always willing to knock off those arbitrary fees if you’re prepared to pay the whole thing off in one payment. I know that; they know that. So what do I have to do to get them to do it?
The girl acted like there was “no way” that she could do it. What do I have to do to get her to knock them off? Ask to speak to “her manager?” Take it up the chain a notch? How much power do I have to knock off some of these fees by waving the “…if I pay the whole thing off right now” carrot under their noses?
It has been my experience that you can credit card fees knocked off:
If there’s a plausible chance that the charge was incurred accidentally (in one case, my wife mailed all our payments one month…without stamps).
If you’ve got a good credit history with this particular holder (and perhaps in general), and
If they think they’ll lose you as a customer if they don’t.
You, I’m afraid, are zero for three. I’d encourage you to make a valiant attempt at it, but I’m guessing that you’ve got the proverbial snowball’s chance.
If you’ve got the moolah, I’d pay it off, anyway, and count the $500 as the best kind of lesson in debt management: the kind that you can just buy your way out of.
This one might work…
-I’d like to pay off my credit card, I owe $1000, but there are several hundred dollars in fees, could you explain them to me.
-Well those are late fees and over limit fees
-But it’s the late fees that put the card over the limit (in a :rolleyes: tone of voice, sometimes you have to play dumb). So I missed payments, and the fee put me over the limit, then you charged me a fee for going over the limit etc…
-Yes, I’m afraid that’s what happened.
-Well, could you remove the fees, if I mail you a check for the full amount less the fees.
-No I’m sorry I really can’t do that
-In that case case what is my total as of right now?
-$1500
-Alright, I’m going to send that in, could you please close my account right away.
-errrr, let me have you talk to my supervisor about that
Now, it probably won’t go exactly like that, but generally if you threaten to close your account, they’ll play ball. OTOH if you’ve been bad enough that you’ve racked up $500 in fees, they might me more then happy to close you’re account and let you not pay some other cc company. Another thing to remember, is that you probably don’t want to close you’re account if you think you’ll have a hard time getting another one somewhere else. You may be best off paying it down and not using it, but still haveing it available.
I dunno. If you’re that far over your limit from their fees and that late in paying your bills they’re very likely already considering closing your account on their own. Losing you as a customer won’t matter to them; as far as they are concerned, you’re a terrible customer that doesn’t pay anyway.
Nothing more to add at the moment, other then my wife, she is a credit card companies dream customer (well, was, until I took over her payments). She was always hovering right at the limit, consistanly late with payments, skipped payments altogether for a month or two at a time, went over the limit, only paid the minimum etc… all the time. So she was always getting hit with fees and having her interest rate hiked up, BUT she always eventually made the payments. So even though it seems like she was a bad customer, she was (in their eyes) a great one. The made lots of money from her.
“Paying off the whole thing right now” doesn’t always work. I had one card ripping me of by charging 27% APR because back in '03 I missed some payments. In 2004 they dropped the APR to 9% for one year, then raised it back to 27% after one year of me making payments. They called it something like a temporary hardship APR and now that I was actually making money and able to pay off my debt, they raised it back up to 27%. When I tried bargaining and telling them that I’d pay off the last $5K in one lump sum unless they lowered my APR to something respectable, they insisted they couldn’t do it. So I paid off the credit card in one lump sum (which I half-intended to do, anyway.)
But I’d advise against cancelling the card. Keep it open, leave no balance on it. It’s better for your credit score. Also, paying off credit cards in one lump sum will often ding your score. My score went DOWN 30 points to 660 when I paid off ALL my debts with that $5K.
Be careful with those late payments and penalties. I have a 10-year credit history, and missed payments for 3 or 4 months in 2003 (during a personal financial crunch), and have had trouble getting credit with any decent creditor. Those are the only black marks on my record–it’s otherwise pristine. So a few missed payments in a row will keep you under 700 for awhile.
The credit card company has COMPLETE leeway with the ENTIRE balance. Especially if you haven’t paid in over 180 days, they’re very happy to bargain.
However, the individual CSR may have little to offer you, per policy.
Their boss may have a little more leeway.
The more likely they think you are to completely default on them FOREVER, the more likely they are to play ball.
The worse your credit report, the better your bargaining position.
If you’re trying to make a large credit purchase soon, the better their bargaining position.
Try calling with some offer worthwhile to them, then if they aren’t buying, ask for a supervisor. You might get lucky.
Remember, if they forgive a debt, they’ll report it as “Income” to you per IRS form 1099. If they waive $1000 worth of debt, you’ll be taxed by the IRS as if you’d earned $1000 more at your job that year.
If you’re young, not likely to bankrupt and likely to have increasing earnings soon, they’re likely to not budge an inch on you and are likely to just wait for you to pay it off.
It’s all a mystery, really. From what I’ve read online, my experience is typical. If you pay off a big balance all at once, it jolts your score. I think the assumption is that you secured financing through other, unreported channels, or something like that. I dunno. A lot about credit scores is counterintuitive.
I researched this a whole lot back in '02.
My best research from back then indicates that your best credit scores for many (but not all) persons will be found when none of their cards or other revolving lines of credit all somewhere between 20 and 50% of their credit limits, both on the whole and individually.
It appears that the system used for scoring involved the concept of different “types of consumer”. First the system pigeonholes you according to what type of consumer you are, THEN it scores you within the range available to your type.
So 5 hard inquiries will hurt you a whole lot worse if you’re an affluent, stable, low-risk type than if you’re the kind of guy who gets turned down at a payday loan place. In fact, if you’re the latter, your score may not change AT ALL when you apply for 5 credit items, whereas if you’re the former, you might drop in excess of 30 points.
Update - I paid off the card today and got all but $50 of the $500 in fees knocked off. I didn’t even have to get uppity - I just explained that I wanted them to knock off of the fees and that I was prepared to pay the whole thing off right now if they could do that.
tone of voice, sometimes you have to play dumb). So I missed payments, and the fee put me over the limit, then you charged me a fee for going over the limit etc…