How To
Beat 'Late Payment' Rip-Offs By Credit Card Companies
by Robert K. Heady
Bank Rate Monitor
If you've
about had it with credit card and mortgage companies that clip
you with late-payment fees after you've paid your bills on time,
here's how you can put those guys against the wall.
You can document the exact day
on which creditors receive your check and not have to shell out
$30 or more in late charges because they claim you didn't make
your payment by the due date.
In fact, it'll cost you as little
as 35 cents extra or nothing at all. You won't have to spend
hours on the phone arguing about when you mailed your payment
to Rob-You-Blind Card Company and when they received it.
Some angry, frustrated readers
report they've solved the problem by sending their payments to
creditors overnight by Federal Express or UPS. But at $16 or
so a pop, that can get a little stiff. There are cheaper ways:
Use the U.S. Postal System.
It charges $2.98 for certified mail within the United States
that's 33 cents for a stamp, $1.40 for "proof of mailing"
and $1.25 for a return receipt. Or, you can fork out $11.75 for
"next-day-delivery" of Express Mail.
But there's an even less-expensive
method: $3.20 for two- or three-day Priority Mail, plus 35 cents
for "Delivery Confirmation." Your Priority Mail will
be assigned a lengthy 20-digit number. If you call the Post Office's
national tracking system at 1-800-222-1811 and punch in your
number, a voice will you the day the creditor received your payment.
Or, you can click onto www.usps.com and obtain delivery confirmation
that way. The system also works for Express Mail via the same
toll-free number and Web site address.
Pay by "demand draft."
To beat your payment deadline, ask the creditor if it will
accept immediate payment over the phone. You simply provide your
checking account number and the bank's routing number (in the
lower-left portion of the check). Allow at least two days for
the payment to be posted, because the creditor must create some
paperwork at his end, then deposit it with his bank.
Caution: Do this only with established
creditors and other companies whom you know. Never give out your
account number to any strange outfit that calls you on the phone. The
good news is that demand draft payments may soon be all-electronic,
instant and paperless. Here's why: NACHA, the huge electronic
payment system that transfers money within the banking industry,
is now experimenting with 25 big institutions to create electronic
debits for consumer accounts. It uses the same technology that's
now employed for direct deposit.
It means that one day you'll be
able to pay creditors from your checking account over the phone
and have your payment posted immediately without anyone having
to shuffle paper.
Open an on-line banking account. Millions of consumers are doing it, and hundreds of banks and credit unions across the United States want your business, regardless of where you live. It's a sure-fire way of paying your bills on time and proving when you paid them.
Typically you start by opening a low-fee checking account, which gives you instant access to all your accounts and even lets you transfer funds. Many on-line banks include a bill-paying feature, but if they don't, you can also sign up with a third-party bill-paying company such as transpoint.com, which is backed by Microsoft, or paytrust.com, paymybills.com, or statusfactory.com. These companies collect, manage and pay your bills electronically for a fee that may be less than $10 per month.
It beats getting blamed and charged for being "late."
Editor's Note: Robert K. Heady is the founding publisher of Bank Rate Monitor and is the co-author of the book, "The Complete Idiot's Guide to Managing Your Money." You can e-mail him at jrn8888@aol.com
