What most people forget is that all of these systems are automated so their is no human to interpret your motivation for payment.

If you pay before the billing cycle ends they'll apply it to your principal. Makes sense to me.

Definitely make sure you have your dates set up properly.

Props to the customer calling in and Capital One reversing the charges. Goes to show that they're not entirely evil. There's that 1% that'll get you a late fee refund.

Sounds like poor programming to me. If your minimum payment has already been applied, the flag for late payment should be disabled until the next period. You should be able to make as many payments in a month as you want.

That's what I was thinking, Saboth. I can understand it not being applied to the next, non-existant statement, but to generate a late payment when an on-time payment has already been made? What?

I have a Mastercard through BofA. I've paid several times a month and have NEVER generated a late payment.

Bank of America did that to me on my first statement. I called and explained this was the first time I had paid a credit card bill and waived my fee.

I had the same issue with Amex. I made a $1000 purchase on Amex & paid it off a few days later. I was able to resolve it with a phone call and get it credited to the 'correct' month.

@Saboth: you can, but they won't be applied to the bill for the next month.

(for example) What happened here is someone payed their bill for February on the 10th, and the billing cycle ends april 11th. They went ahead and scheduled their next bill to be paid on April 10th assuming it would be good. They didn't look at their account again until yesterday (the 30th) and it has late fees applied because the payment on the 10th was applied to the balance rather than the next bill. The next bill would have all the financing charges applied along with a new minimum payment that would have to be paid.

Again, simple mistake and Capital one seems to have handled it nicely.

@H1N1_GitEmSteveDave: Did you take like a pirate to them? That has worked for me in the past.

I guess it'd be nice if they let you choose which billing period you'd like your payment to apply to, but if they're not going to do that, this seems like a pretty rational alternative. Let's say they automatically applied this payment to the 2nd month (like the OP assumed it would) - someone who tried making 2 payments in a single month would be pissed that the interest for the next month was calculated after the first payment, not after the second.

It doesn't seem like a rational alternative, @nataku83. They shouldn't generate a LATE PAYMENT for a billing period that was already paid for. It should be applied as an extra payment to that same payment. It makes sense not to apply it to a statement that doesn't exist yet, but it doesn't make sense to charge a late payment for a payment that ... isn't late. Like Saboth said, it seems like a programming error.

"They didn't look at their account again until yesterday (the 30th) and it has late fees applied because the payment on the 10th was applied to the balance rather than the next bill."

AH-HAH. Ok, that makes sense.

@Saboth: So how would you go about paying down the principal with a second check? If it was applied to the next payment, it would count against the interest as well as the principal.

Sounds like proper programming to me.

Discover used to have something where if you paid more then the minimum in a month then you didn't have to pay a minimum the next month. (assuming paid amount = 2 times the minimum).

Haven't used my discover in a while so no idea if it still holds true.

This happened to my wife with Citibank too. It was a pain in the neck, because she just figured she paid everything off, but there were some charges that hadn't gone through. I think we got them to waive the late fee, but they account did start to accrue interest after that for a few months, so we had to use a different card.

Isn't this just common sense? All activity is contained within the billing period until it closes, they issue an activity statement, then you start all over again...

If you schedule e-payments, you can always schedule the pay date, just set it after the date this current billing period ends. This isn't rocket science. And contrary to popular belief, they can't look up your ass and read your mind.

@ZukeZuke it is common sense. No one was saying it wasn't. It was a simple mistake, and Creidt One did a good thing by refunding the fee. Humans make mistakes.

I've set up weekly payments to avoid this weirdness. I basically make sure that three weeks of payments is always greater than the minimum due.

While I pay significantly more than the minimum as a general rule, this is my safety net to ensure things don't get messed up by either short months (February), or arbitrary payment due date modifications.

@chipslave: No, technically, I was still employed by them, so talking funny might have been bad.

@nakedscience - yes, the title of the post was misleading - it did not appear that they were charged a late fee on a month where they paid twice, but rather on the following month when they did not pay at all. ah, sensationalism...

More like, this is a good reason to stop banking with a huge-o corporate bank.

I left Capital One, closing my last account with them last week to make my move to a credit union.

When I went in to close the account, the agents were wearing Capital One buttons with flashing lights to announce their rewards program. My new bankers don't wear flashy buttons. Ha ha!

I had to call 3 times to Chase once for this since we paid the bill the day the statement came out. It I guess wasn't generated until the afternoon so the payment showed on the bill. We didn't realize until the next cycle when they slapped a $40 fee and raised my APR to 25% It took a lot of persuading but they finally dropped the fee and the APR adjustment. Lets just say I pay attention more and Chase is no longer in my wallet!!

When did "paid" become "payed"?

Banks sucks that's why I keep all my money under my mattress!

I had the same sort of thing happen to me with American Express a few months ago. I knew I was going to have a busy few weeks, so I pre-paid a bunch of bills to make sure I wouldn't miss any in the frenzy. I had done this before when going out of the country on vacation, so I figured I'd be safe again.

But the amount I pre-paid on my Amex was slightly less than the total that came due, however, it was significantly more than the minimum payment (I don't carry a balance, I pay it off in full each month). I figured since there was a small difference that amounted to a carried balance, it was fair enough for them to charge me interest on that. But I was furious that they also charged me a late fee of more than double what that balance was, especially since I had effectively pre-paid the minimum payment.

The guy on the phone told me that my pre-payment was considered to be part of the last month's statement, so as far as they were concerned, I hadn't paid the minimum payment, hence the late fee.

I was really angry and told them it was making me want to reduce usage of the card to bare minimum. I told him to look at my payment history to see that I'm no deadbeat. He did, and as a courtesy waived the late fee.

Now I've begun a habit of putting in a $50 payment a few times a month, whenever I'm paying other bills online, just to make sure this doesn't happen again (and to kill the persistent "periodic finance charges" that kept coming up after this apparent non-payment).

@howie_in_az:

Yes. Yes. A thousand times yes. I have seen this "payed" word more and more in the last several weeks and it is making me absolutely nuts.

I know this is the internet, and spelling counts for very little, but it is a FOUR LETTER WORD.

/ends rant, whistles

Another misleading, sensational, BANKSAREEVILANDOUTTOKILLYOU headline from the Consumerist, quelle surprise.

So this person paid twice during one billing cycle, and paid nothing in the next. So she got a late fee. What's the problem hear? And why the scare quotes around "late fee"? That's what it was.

@WolfBaconFlavorMANGURT_GitEmSteveDave: A pirate voice would command respect I would think. Anyway, its food for thought for the next time.

Modern credit cards are not designed to make money for banks based off the criminal amount of interest charged but rather off of fees. We all know this.

This happened to me. They said "it was to prevent fraud". Now how many thieves are going to make a payment on my stolen card? I had to talk to 3 people at this sleazy company before they said they would waive it "this time" but I should not pay early again!

@WolfBaconFlavorMANGURT_GitEmSteveDave:

why not use the royal "we"- they might think they're talking to royalty or something...

"only peasants would pay their bill on time or late!"

I don't carry a balance on any of my credit cards..

If I expect that I'm going to have a large bill to pay (for example vacation), I make a payment on the card. This ensures that even if the credit card company lowers my balance for whatever reason I have enough funds to cover myself.

I normally do this before extended vacations.

Sounds like user error to me. Not only is the lead a bit sensationalized, the story makes me /headdesk with respect to the whole victim meme.

Seriously folks, is it that hard to realize that CC companies can't arbitrarily charge you money for things? I'll get slammed for blaming the OP, but dammit if I think it isn't hard to understand payment inside a billing period = applied to current period.

I pay my credit card about 3x a month, and I've never run into this problem. Thank goodness my CC company has this figured out, otherwise I'd be calling them all the time over such bogus fees.

@kaceetheconsumer:

It wasn't an "apparent" non-payment, it was an actual, factual, non-payment. Cripes, statement ends on xx/xx/xx, minmum due xx/xx/xx + 15, any payment before the statement end date applies to the period in which it was made.

They're using the wrong algorithm. But then, what decent programmer would work for Capital One. Or they outsourced the development to some distant land.

At least they fixed it after the fact. Some places don't even do that.

I had the same thing happen. I paid three days early and didn't realize that it was going to the previous months bill. Thankfully when I found out, I was able to get them to reverse the late fee charge.

@nataku83: Hey now. I won't deny I write sensational headlines sometimes (in both senses of the word!) but this is not an example of one. What I wrote is accurate and describes what happened very broadly. I can't put the entire post in a headline, which is why there's all that descriptive text below it.

@Saboth:
I think the programming is correct. Should you be able to send in a bunch of $10 checks instead of one $100 check so that your next ten minimum payments are covered?

I don't have any credit cards. I hate 'em.

Am I weird?

Ok, so let's suppose I run up a $1000 bill, and pay it all off when the statement arrives.

Now, let's suppose that run up another $1000 next month and have a minimum payment of 50 bucks.

Should I be able to claim that I've made 20 early payments of $50 each last month and don't owe them anything for almost 2 years?

@RodAox: Where do you live? Specific Street address please.

The exact same thing happened with me and Bank of America, only I didn't call to complain. I realize I should have, but I didn't think I could actually argue the point with them very effectively.

It came at a really terrible time though, I'm still bitter.

Realize what she did was pay the minimum amount in the last billing cycle but made NO payment in the billing cycle she needed to. This is not the fault of Capital One. If they could factor that in, then if somebody pays off their huge balance in 12 checks, then really would not need to make another payment for the entire year. This is a REVOLVING charge, so unless you had a negative balance the previous month they rightfully charged the late fee. If it were your your electric or cable bill that would be different

@IfThenElvis: Strange, I haven't had this with my AmEx Blue -- but then I'm been paying 'em off almost any paycheck I get. (And before you ask, I have a $2K credit limit and I've already set a budget down for paying it off that I'm strictly sticking to)

This happened to me and it was what caused me to close my account 3 years ago. I was livid. They said I paid twice in 1 month. I paid it off and closed it. There was no waiving my fee. Buttholes.

Stay far, far, far, far, far, away from Capital One. They are a predatory bank/credit card issuer.

You can't pay ahead on revolving debt. That should be a no brainer.

I believe that everyone should check the status of their account online frequently. Mistakes can happen. Credit card companies can apply arcane rules that cost you money. The mail can be delayed or lost. Why risk the hassle of having to deal with the problem. At the very least, if you have a balance, pay the minimum after the new statement is posted on the website (not when you receive it in the mail) so that you can avoid late fees. You can always add payments later in the month.