Monday, June 29, 2009

More Disaster Narrowly Averted

Folks, if any of you are in the same boat I am in (the Titanic Credit Disaster, that is), or even in a smaller version of the boat (such as the Credit Trouble Yacht), take this warning to heart: You can never be too careful about due dates.

I recently transferred balances to my CitiBank credit card. They were offering 0% interest for six months, with 8.24% after that. So I transferred some of my 20% balances over there. The first bill had a due date of May 18. I paid it, a couple of days early. Yay, I thought, a step towards a better financial position.

Then in June, I went out of town. I got back and sorted through my mail on June 17, and found that my CitiBank card had been due on June 16. Major oops. The payment was a day late.

So I paid it right away, online.

Today I got the next bill (showing a due date of July 17, by the way), and found that CitiBank had charged me a $39.00 late fee for missing that payment by one day (which I expected) and had increased the interest rate to the default rate of 29.99% (which I did not expect). That resulted in an interest charge for the month of $374.86 -- when it was supposed to be zero.... All I could think was, "holy s---."

I was in despair, thinking of paying approximately an extra $400 a month in interest ($1600 for the four months remaining on the six-month promotional period!!), all because I missed a payment deadline by one day!! I haven't done the math, but 30% versus 8.24% has to be a huge differential in interest payments, too, even after the promotional period expires.... this was just not good at all.

And I was more than a little annoyed with Citibank. After all, the payment was only late by one day - does that really justify a "default" interest rate, at an additional cost of $1600 for five months?!? I mean, really... it felt like they laid a trap for me by moving the due date two days earlier and then charging me $1600 for missing it.

So I called CitiBank today. And my faith in humanity (or at least in CitiBank) is restored. The very helpful account manager agreed to waive the late fee, plus the interest that already had been charged, and to reduce the interest rate back down to the promotional 0%.

And so I can quit crying over this particular credit disaster.

And I have learned a lesson: Never rely on the prior month's due date to tell you when this month's due date will be. Always take your credit card information with you when you travel, and stay on top of deadlines and payments that may be due while you are gone.

I'm just glad the lesson did not, in fact, end up costing me $1600-plus.

1 comment:

  1. Things will get better! I finally had to file for BR to end the madness!