|On my next bill, Chase
Visa charged me a $25 "late fee" plus $33.90
Only after eight minutes of recorded messages and music, 10 minutes with an
arrogant agent, and six or seven minutes with her supervisor, was I able to get
the charges removed. But that came with a stern lecture from the supervisor about
how late payments would not be tolerated in the future – I assume she meant
on Thanksgiving Day – and that only because of my good payment history
was she able to reverse the charges.
A few months earlier I went to pay my MasterCard bill and saw that I owed
a total of 17 cents. Misguidedly clinging to some old rule about “sums
under one dollar,” I decided to let it wait until it was time to pay the
following month. For this I was charged a “a late fee” of $25.
It’s been a year since the national Credit Card Act took effect, capping
late fees at $25 for the first offense, and $35 for the second slip within a
six-month period. The law also requires fees and penalties to be “reasonable
and proportional” to the violation.
One particular provision caught my eye: If due dates fall on weekends or holidays,
payments must be credited to the account on the next business day without penalties.
So why didn’t the law protect me on July 4th? It turns out that if I had
made my electronic payment on the 4th it would have been credited on the 5th
with no fee; however, by making it on the morning of the 5th I was legally “late” because
I failed to initiate it on the holiday. Leave it to bankers to find this loophole.
Americans currently hold an estimated 610 million credit cards, and each month
a relatively small percent of them are not paid on time. As a result, credit
card companies collect nearly $30 billion in late fees each year. It’s
a business on top of a business – similar to the way airlines now make
exorbitant profits from itinerary change fees, baggage fees, etc.
Meanwhile, banks are squeezing consumers as never before, with new fees for
checking accounts, and virtually no interest on savings.
This month, many banks cut rates on four- and five-year certificates of deposit
to historic lows.
Still, we small potatoes can’t help but laugh at the recent announcement
by Bank of New York Mellon Corp. that it will now charge customers a fee if they
deposit too much money. Under the new deal, any client depositing more than $50
million will be required to pay the bank a penalty.
It’s worth noting that Bank of New York Mellon currently has $23.6 trillion
in its custody.
Meanwhile, as I fretted over my two frustrating experiences with bank credit
cards, I wondered if it’s really true that everyone has at least one complaint.
So I asked my barber, Rick, if he has a banking beef.
“Are you kidding?” he replied. He ran into the back room and came
back with his monthly bank statement from Chase.
“I’ve got almost two thousand dollars in there,” said Rick. “And
look at this line, right here where it gives the total monthly interest they
paid.” How much did I get? A penny.”
Chase is lucky it didn’t ask Rick for his thoughts.
(c) Peter Funt. This column was originally distributed by the Cagle Syndicate.