Seriously? $1.50? (AGR credit card fee)

[Everydaymatters]

Two of my insurance bills are automatically charged to my AGR account. I always pay it off when I get the bill.

My latest bill shows a $1.50 "mininum interest charge". I have never had that happen on any of my other credit cards and I find it kind of, well, tacky and cheap! We all know they charge the merchant and also charge us if we don't pay the balance each month. But I pay in full every month.

If I didn't have enough points to take a short run into Chicago, I'd just stop using the AGR card.

Anyone else have this happen?

 

[jebr]

I've never had it happen. I'd call Bank of America and see what happened; maybe a payment didn't apply properly or the balance somehow wasn't registered as truly paid in full. I've also usually had decent luck getting late fees waived (assuming it's not a common occurrence) by asking nicely for them - assuming it's a one off they may be willing to credit back the interest fee as well if asked.

 

[Devil's Advocate]

Some action/inaction/delay created an interest charging event. The amount of interest to be charged landed below $1.50 so it was raised to the minimum interest charge as per the terms of the card. The bigger problem is that the interest charge itself is likely to create yet another another minimum interest event, which will in turn create another charge the month after that, and so on. Credit card accounts are not designed to give away benefits for nothing. They are designed to watch for even the most minor of mistakes and misunderstandings which they can eventually turn into a chain of never ending fees and fines.

 

[Ryan]

It’s right there in the credit card disclosure:

 

[jebr]

They are designed to watch for even the most minor of mistakes and misunderstandings which they can eventually turn into a chain of never ending fees and fines.

While I won't disagree on the harm credit cards can do, I've never had an instance where paying in full the next month (minus any courtesy credits given) has resulted in ongoing fees. They've also included the fee in the statement amount on the next bill (so it wasn't hidden somewhere where it'd be hard to figure out what to pay to avoid interest.)

Some fees are definitely very punitive and if income is tight the unexpected fees can cause cascading issues, but I disagree that they're designed to blow up a minor mistake into endless fees if someone generally pays attention to their bills, especially if they contact the card issuer and remedy the mistake. Maybe I've just been extra lucky with credit cards, though.

 

[Everydaymatters]

It’s right there in the credit card disclosure:

IMG_4940.jpg

Ryan, I couldn't open it, but I will check my statement

 

[the_traveler]

It’s possible it could be something “simple” like your payment did not apply correctly or on time. As Jeb said, I would call BoA and ask the reason and ask for it to be removed.

 

[Devil's Advocate]

They are designed to watch for even the most minor of mistakes and misunderstandings which they can eventually turn into a chain of never ending fees and fines.

I've never had an instance where paying in full the next month (minus any courtesy credits given) has resulted in ongoing fees. They've also included the fee in the statement amount on the next bill (so it wasn't hidden somewhere where it'd be hard to figure out what to pay to avoid interest.) Some fees are definitely very punitive and if income is tight the unexpected fees can cause cascading issues, but I disagree that they're designed to blow up a minor mistake into endless fees if someone generally pays attention to their bills, especially if they contact the card issuer and remedy the mistake. Maybe I've just been extra lucky with credit cards, though.

It's true that if you're always on top of your finances you can usually fix minor problems and keep things kosher with a timely phone call or certified letter. But the US banking system is a long con, not a short snatch. The idea isn't to burn you in the short term but to wait for you to slip up and miss something later on down the road. Maybe you're arrested or lose your job. Maybe a close family member dies unexpectedly. Maybe a tragic event or a chemical imbalance causes you to become depressed and despondent. Maybe you suffer a medical emergency or an adversarial divorce.

It doesn't even have to be a negative thing. Maybe you fall in love and lose track of time and space. Maybe you simply grow too old to keep a sharp eye on your account activity. Anything that eventually takes your attention away from from your finances can become a ready catalyst for a debilitating second act. Even when you have caring family members trying to help you by closing your accounts the banks will sometimes fight tooth and nail to prevent it. Once upon a time if a young family made some big mistakes they could declare bankruptcy and try to rebuild their lives again, but these days personal bankruptcy laws have been lobbied into near irrelevance.

 

[Everydaymatters]

They are designed to watch for even the most minor of mistakes and misunderstandings which they can eventually turn into a chain of never ending fees and fines.

I've never had an instance where paying in full the next month (minus any courtesy credits given) has resulted in ongoing fees. They've also included the fee in the statement amount on the next bill (so it wasn't hidden somewhere where it'd be hard to figure out what to pay to avoid interest.) Some fees are definitely very punitive and if income is tight the unexpected fees can cause cascading issues, but I disagree that they're designed to blow up a minor mistake into endless fees if someone generally pays attention to their bills, especially if they contact the card issuer and remedy the mistake. Maybe I've just been extra lucky with credit cards, though.

It's true that if you're always on top of your finances you can usually fix minor problems and keep things kosher with a timely phone call or certified letter. But the US banking system is a long con, not a short snatch. The idea isn't to burn you in the short term but to wait for you to slip up and miss something later on down the road. Maybe you're arrested or lose your job. Maybe a close family member dies unexpectedly. Maybe a tragic event or a chemical imbalance causes you to become depressed and despondent. Maybe you suffer a medical emergency or an adversarial divorce.

It doesn't even have to be a negative thing. Maybe you fall in love and lose track of time and space. Maybe you simply grow too old to keep a sharp eye on your account activity. Anything that eventually takes your attention away from from your finances can become a ready catalyst for a debilitating second act. Even when you have caring family members trying to help you by closing your accounts the banks will sometimes fight tooth and nail to prevent it. Once upon a time if a young family made some big mistakes they could declare bankruptcy and try to rebuild their lives again, but these days personal bankruptcy laws have been lobbied into near irrelevance.

That's a lot of Maybe's. At one time or another, I've had some, if not all, of those things happen. But I have never missed a payment and I have never been late paying a bill. So, at least in my case, I wouldn't anticipate anything would stop me from paying my bills. On time.

 

[the_traveler]

What I do to make certain about the payment posting is that on the BoA website, I signed up to have it paid directly from my bank via ACH. If you authorize the payment by (I think) 7 pm, it will post to your account that night.

Having the BoA app, many times as soon as I see it closed, I pay it off. So many times, it is paid a few days before I receive the bill in the mail.

 

[Dave Van]

Welcome to BoA

 

[willem]

What I do to make certain about the payment posting is that on the BoA website, I signed up to have it paid directly from my bank via ACH. If you authorize the payment by (I think) 7 pm, it will post to your account that night.

Having the BoA app, many times as soon as I see it closed, I pay it off. So many times, it is paid a few days before I receive the bill in the mail.

At first, I thought you meant that payments get made automatically. Then it seemed that you set up a mechanism but need to trigger it each month.

All my credit cards (and utilities) allow me to set up automatic payments. The bank (or utility) takes the money from the designated account on the due date, without action by me. In the case of credit cards, I can designate that the payment should be the entire balance due. (There are other options, but I always choose entire balance.)

Long ago, when I first set up one of these automatic payments, I was assured that I could alter the payment if there was a charge that I disputed or if I just didn't want to pay the full amount. I have never tested this alleged capability.

Iowa City even offered a $1 credit each month on its water bill if the customer paid this way, because it simplified things so much for the city. (Contrast this with the state of Minnesota, which charges a fee to pay by electronic funds transfer on its web site, thus pushing me to pay by check, which requires a state employee or contractor to handle a piece of paper. Fools!)

In short, this system has worked for me, and I believe it beats writing a check or remembering to visit a web site to trigger a payment. My payments are all made as late as possible, so I get the float on the money (not that that has been worth anything since 2008).

 

[Everydaymatters]

Wow! What a racket! I called BOA and I was told that back in July I paid all except $40. In August I paid IN FULL.

For the September statement, I paid all except the $1.50, which they charged for not paying in full back in July. I honestly didn't notice the $1.50 and paid everything except the $1.50.

So because in September I didn't pay the $1.50 interest charged for the July statement, in my October statement I was charged the $1.50 because I didn't pay the $1.50 charged because I didn't pay off the entire balance in July.

OK. Now I get it. Do you?

Anyhow, she was very nice, I was very nice, we were both laughing, but she still couldn't get rid of the $1.50. She did try. There you have it!

 

[Bob Dylan]

Generally once you become involved in a Giant Company's Computer Maze, it takes an act of Congress to get it straightened out.

Companies that empower their Customer Service employees to handle situations like this ( rare) are a pleasure to do business with!

Glad you got it settled Betty, it always pays to check statements closely and to pay the Full Amount when due!

I had a similar situation with American Express several years ago over 14 Cents!, but they were able to fix it easily over the phone!

 

[Ryan]

This isn’t “slamming”, this is failure to pay the full amount due in September and correctly getting charged interest for it.

I’m not sure how you pay “all but the $1.50”, when you want to pay in full, you look at the bill and pay the big number at the bottom.

 

[Everydaymatters]

This isn’t “slamming”, this is failure to pay the full amount due in September and correctly getting charged interest for it.

I’m not sure how you pay “all but the $1.50”, when you want to pay in full, you look at the bill and pay the big number at the bottom.

You're right, Ryan. I have no defense. I knew exactly what I had charged and that's what I paid in September. But I still think it's tacky, $1.50! Geesh!

As Jim said, "Companies that empower their customer service employees to handle situations like this are a pleasure to do business with."

 

[AmtrakBlue]

This isn’t “slamming”, this is failure to pay the full amount due in September and correctly getting charged interest for it.

I’m not sure how you pay “all but the $1.50”, when you want to pay in full, you look at the bill and pay the big number at the bottom.

You're right, Ryan. I have no defense. I knew exactly what I had charged and that's what I paid in September. But I still think it's tacky, $1.50! Geesh!

As Jim said, "Companies that empower their customer service employees to handle situations like this are a pleasure to do business with."

It would probably cost the company more than $1.50 to make the adjustment. Time is money.

 

[Devil's Advocate]

This isn’t “slamming”, this is failure to pay the full amount due in September and correctly getting charged interest for it. I’m not sure how you pay “all but the $1.50”, when you want to pay in full, you look at the bill and pay the big number at the bottom.

You're right, Ryan. I have no defense. I knew exactly what I had charged and that's what I paid in September. But I still think it's tacky, $1.50! Geesh! As Jim said, "Companies that empower their customer service employees to handle situations like this are a pleasure to do business with."

It would probably cost the company more than $1.50 to make the adjustment. Time is money.

Yeah, I'm sure they wrote their own rules in a way that constantly loses them money.

 

[jebr]

This isn’t “slamming”, this is failure to pay the full amount due in September and correctly getting charged interest for it.

I’m not sure how you pay “all but the $1.50”, when you want to pay in full, you look at the bill and pay the big number at the bottom.

You're right, Ryan. I have no defense. I knew exactly what I had charged and that's what I paid in September. But I still think it's tacky, $1.50! Geesh!

As Jim said, "Companies that empower their customer service employees to handle situations like this are a pleasure to do business with."

It would probably cost the company more than $1.50 to make the adjustment. Time is money.

Considering she's already calling in and talking to the representative, if the representative is empowered to credit it back the additional time to apply the credit is likely no more than the time it takes to argue with someone who's upset over the fee. Not to mention the risk of losing the customer over the fee (it costs a lot to attract a customer, and minor steps to keep a customer are almost certainly cheaper than trying to win a new customer.) Even if a customer isn't paying interest or an annual fee, they're still generating swipe fee revenue for the bank, and a $1.50 waiver to keep a customer satisfied (especially since it's not a transaction and just a fee) is well below the revenue they're likely generating for the bank.

It's possible that Bank of America makes it intentionally difficult to apply credits; it wouldn't surprise me, actually (I've never had to contact them regarding credits,) but the bank isn't going to go broke over a $1.50 fee reversal.

 

[SarahZ]

To be fair, it's not a "fee"; it's interest charged on the $40 she didn't pay off when paying for that charge cycle.

Had she truly paid in full when paying the bill for July, there would not have been an interest charge.

 

[the_traveler]

This isnt slamming, this is failure to pay the full amount due in September and correctly getting charged interest for it. Im not sure how you pay all but the $1.50, when you want to pay in full, you look at the bill and pay the big number at the bottom.

You're right, Ryan. I have no defense. I knew exactly what I had charged and that's what I paid in September. But I still think it's tacky, $1.50! Geesh! As Jim said, "Companies that empower their customer service employees to handle situations like this are a pleasure to do business with."

It would probably cost the company more than $1.50 to make the adjustment. Time is money.

Yeah, I'm sure they wrote their own rules in a way that constantly loses them money.

I once made a purchase from (I think it was) LL Bean. I order to get points/miles for this purchase, I bought gift cards from GiftCertificates.com - but you could only get them in multiples of $25. So I bought $100 worth. My 2 items were $49.95 each or $99.90 total.
They sent me a refund check for 10¢! I bet it cost more in salaries and postage than 10¢!

 

[Ryan]

To be fair, it's not a "fee"; it's interest charged on the $40 she didn't pay off when paying for that charge cycle.

Had she truly paid in full when paying the bill for July, there would not have been an interest charge.

 

[willem]

[...] it costs a lot to attract a customer, and minor steps to keep a customer are almost certainly cheaper than trying to win a new customer.

That's why I have trouble understanding why businesses, especially banks, will offer significant incentives to new customers but treat existing customers poorly. I assume some manager's bonus is based on number of new customers and not based on number of departing customers, but that begs the question.

 

[jis]

[...] it costs a lot to attract a customer, and minor steps to keep a customer are almost certainly cheaper than trying to win a new customer.

That's why I have trouble understanding why businesses, especially banks, will offer significant incentives to new customers but treat existing customers poorly. I assume some manager's bonus is based on number of new customers and not based on number of departing customers, but that begs the question.

One could surmise that it follows from the general "throwaway" mindset that rules everyone's interaction with any kind of item of commerce in the current culture. Just like perfectly good and serviceable furniture is put out on the curb to be replaced by newer shinier ones....

 

[Bob Dylan]

Another example of "The Big Lie":

New and Improved!!!