What to Do if You Think Your Credit Card Issuer Isn’t Playing It Straight

Q: I have a platinum MasterCard. I went over my credit limit because the card issuer said it did not receive my last payment in time to be posted. I use a postage meter, and the payment was sent to the company two weeks before the due date, for an amount that was triple the minimum payment. The company claims it did not receive my payment until a week after the due date. It slapped me with an “over credit limit fee” of $125, plus a late fee. When I called, the phone representative said that the company does not consider postmarks on envelopes, even if registered, as the date payments were received. It considers payments received when its credit people post them to the account. Have you ever heard of this?

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A: Unfortunately, yes. By law, credit card companies are required to post payments as soon as they are received. Companies are not required to pay attention to postmarks. Many companies rely on outside processing companies to open envelopes and record payments for them, which should reduce the incentive to post payments late. But by the volume of consumer howls, the system’s not working.

The problem stems from the card companies’ own policies. In the last two years, most credit card companies adopted a “zero tolerance” stance on late payments. Where you used to get up to 10 days after the due date before you were slapped with a late fee, today most card companies don’t give you a minute’s grace.

Customers have sued the companies, sometimes successfully, over their late-fee practices, with some claiming the card issuers failed to acknowledge payments sent weeks in advance or even changed due dates from month to month to confuse customers and reap more fees. Some companies also have a nasty habit of jacking up your interest rate if you’re late with a payment. Two of the companies that were most criticized, First USA and Providian, have since reinstated some leeway so that you are not charged should your payment arrive a day or two late.

Your only mistake was in accepting the phone representative’s word as law. Demand to speak to the supervisor. Explain that you will transfer your balance to another card and close your account if the fees are not waived. The key is not to argue with the company about whether its policy makes sense; shift the discussion to whether it wants to keep you as a customer. You might consider taking your business elsewhere even if the company grants your request; a $125 over-limit fee is ludicrous.

Does Paying by PC Make Sense?

Q My bank is encouraging me to pay my bills via my personal computer. I like the idea of not having to write checks and buy stamps, plus it’s waiving the fee for the first few months. How well does this really work?

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A Not very. Most businesses still aren’t set up to accept electronic checks, so the banks wind up doing what you would do--making out a paper check, sticking it in an envelope and mailing it to the vendor, which slows down how quickly your money would get to its target. Also, banks often take the money for customers’ bills out of their accounts a week or so before it’s actually sent to the merchants. The banks, of course, make interest on that money--known as the float--and yet still many charge for the privilege of paying by PC.

These are among the reasons computerized bill paying hasn’t taken off. Presumably, things will get better; some companies are setting up new systems that use Web sites for faster service.

If your goal is to end the monthly misery of bill paying, you might consider pay-by-phone services, although some people find them difficult to use. You also might want to try automatic direct payment arrangements. You don’t need to do anything to pay those bills except be sure there’s enough money in your account when the bill will be paid. Maybe because this is inherently a simpler process, these arrangements tend to work more smoothly. Utilities, mortgage lenders and certain other vendors participate.

Liz Pulliam is a personal finance writer for The Times. Send questions to her at liz.pulliam@latimes.com, or mail them to Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. For past Money Talk questions and answers, visit The Times’ Web site at https://www.latimes.com/moneytalk.