Chase Sets Early Payment Trap, Customer Falls Into It

Daniel’s Providian/WaMu credit card was recently absorbed into Chase’s swollen belly, and they welcomed him to their family by catching him in a technicality that cost him $39. Here’s a good example of why you need to pay attention to statement cycles, even if your bank won’t tell you to.

Daniel had a payment due on September 6th, so he paid it on August 22nd. Then, the day after that payment was due—that is, on September 7th—he made another payment for the next cycle.

The problem is, that new cycle hadn’t started yet, so Chase applied it as a second payment to his past statement. Then when the new due date came and passed earlier this month, they reported him late and charged him a $39 late fee.

Daniel has repeatedly tried to reason with Chase, pointing out that he has a history of making all of his payments on time and early, but Chase would only repeat the same boilerplate rejection over and over. Below are some of the responses Daniel’s gotten from Chase CSRs this month:

I am unable to take further action regarding the late fee reflected on your statement. Your payment was due on 10/7/2009 and as of today 10/13/2009 we have yet to receive a payment for your account.

Please keep in mind that Chase offers the following tools to better assist you in managing your account:

-Alerts – Alerts can be personalized to fit your personal needs.
-AutoPay – Autopay can be set up to pay the minimum payment or statement balance in full on your statement due date.

Although, I wasn’t able to make the adjustment as requested, I am glad I was able to provide other payment options. If you have any further questions, please reply using the Secure Message Center.

Your account was previously reviewed and the response explained why we could not make the adjustment requested. I am unable to take further action regarding the late fee reflected on your November statement.

I apologize we could not credit your account as you wished but hope that you have a good week.

If you have any further questions, please reply using the Secure Message Center.

Thank you for taking the time to contact us again in regards to the payment made on your account ending XXXX.

A late fee was assessed because your payment of $64.38 was received before your 09/11/2009 statement cycled. Therefore, the payment was applied to the previous due date of 09/06/2009 so a payment for the 10/06/2009 due date has not been received.

Hence, a minimum payment is due and the account is in past due status.

Thank you for contacting Chase with regards to the issues currently affecting your account.

I am unable to remove the late payment fee and interest charges because a minimum payment was not received by the due date.

If you have any further questions, please reply using the Secure Message Center.

This is a common enough occurrence (at least judging by the tips we receive) that I suspect it’s a deliberate fee trap set up by credit card companies: they get you in the habit of thinking in terms of a payment due date, but what matters just as much is the statement cycle date, which they conveniently gloss over. Then people attempt to pay early because they’re trying to be more responsible, and the credit card company makes a little extra money.

The bank could easily avoid this by presenting an alert when a customer schedules a payment that says, “This payment will be applied to the statement cycle of [date range].” That Chase doesn’t do this makes it pretty clear that it’s yet another crack the bank hopes new customers like you fall into.

Don’t give up the fight yet, Daniel. So far all you’ve done is dealt with the lowest, least empowered foot soldiers on the Chase side of things—faceless CSRs who spend their days assembling responses from snippets of pre-written blather. Here are two other strategies to try:

1. Call Chase and explain your story. Make it clear you understand now what the “statement cycle” date means as far as paying your bill, but that this wasn’t made clear to you in any way as you scheduled that payment, and that’s why you were led to believe it would apply to your next payment. If you have proof that an identical action resulted in no late fee back when the card was owned by WaMu, point that out. Escalate the issue as high as you can if you keep running into bad Do Nothing employees.

2. If that fails, try sending an Executive Email Carpet Bomb (EECB) to Chase. Make your letter short but full of detail, and make it very clear what happened.

If Chase ignores you, complain to the following agencies. Remember, charging a late fee for a missed deadline isn’t illegal, and that’s really all that happened here. But what you should keep hammering over and over is the fact that Chase makes it possible for customers to accidentally pay “too early” without triggering any sort of warning, and then uses that trap to generate late fees.

1. Report Chase to the Comptroller of the Currency at 202-874-4700.

2. Report Chase to your state’s Office of the Attorney General.

3. Report Chase to your elected officials. You might want to make sure yours are on the side of consumers first—here’s how senators voted on the Credit CARD Act of 2009.

4. Report Chase to the FTC:

Division of Credit Practices
Bureau of Consumer Protection
Federal Trade Commission
Washington, D.C. 20580
Online FTC Complaint Assistant

(Photo: blmurch)

Comments

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  1. bohemian says:

    So they make it hard for people to make a payment at the last minute by charging people $10 to pay over the phone and delaying online payment posting to the system. If you pay early you get smacked anyway. So you have about five hours on one day that your payment must magically drop into their system or else? Stupid.

    • GearheadGeek says:

      @bohemian: 5 hours, 2 weeks, something like that. I’m not saying it’s not stupid, but it’s not a new thing. I’ve gotten caught by it once or twice to the extent that 2 payments posted in 1 cycle and I had to schedule a 3rd (back in the days of nearly-0% promo rates when I would actually carry a balance) but my geeky OCD makes me check their sites a few times a month “just to see if everything’s alright” so my weirdness saved me late fees.

    • Sunshine1970 says:

      @bohemian: BoA does something similar with online payments. It takes 24-48 hours before a payment goes through, so if you pay on the day it’s due you’ll get smacked with a late fee because the payment doesn’t go through for 1-2 days after it was submitted.

      I’ve gotten in the habit to just do a weekly payment if I have something to pay off on the card, which also ensures that I won’t ever be late on a payment.

      I think they hate me…

      • GearheadGeek says:

        @Sunshine1970: If you’re their customer, they hate you. It’s what they do.

      • rocketbear79 says:

        @Sunshine1970: The payment doesn’t get debited from your checking account, but it does get “posted” as long as it is before 3 pm EST. Or has this changed? I haven’t paid online for my BoA card in awhile unless you count scheduling a billpay which I always tell to apply right on the due date.

        • mianne prays her parents outlive the TSA says:

          @rocketbear79: My Citi card does allow a payment made online before about 2pm to be posted the same day. Meanwhile my HSBC card’s payment will post about 2-3 business days after I make the payment regardless of what time the payment is submitted. Or one can pay a “Rush Payment Fee” and have the payment applied the same day.

          In other words, certain companies or at least certain cards, are bigger fee traps than others.

      • Lulu at How I Save Money says:

        @Sunshine1970:
        I pay weekly too and don’t even know when my due dates are right now. I don’t carry a balance but I do get their rewards….so they hate me as well.

    • stranger than fiction says:

      @bohemian: There is a little-known provision of law (hidden in the FDCPA maybe? I don’t have time to dig up my notes) that requires credit card companies to accept all forms of payment equally â€” if a cashier’s check, a bucket of pennies or anything else arrives on time, there should be no difference. I once made an online payment on the due date about 2 hours before their stated cutoff time for mailed payments. They chose not to credit it til the next day â€” and charged me a then-$25 late fee (tells you how long ago it was lol). I RAISED HELL, citing this law, and they refunded my $25 PDQ but went to the trouble to insist in writing(!) that they had done nothing wrong and the refund was a “courtesy”. CYA much?

      So following that logic a bit farther, it seems to me that any card company charging a “rush payment fee” any time before their stated cutoff time is on the wrong side of the law (though nobody in a position to do anything about it seems to give a shit). Unfortunately, by structuring it that way, they leave you with the option of refusing to pay their game and subsequently having to fight being accused of lateness (with lateness having its own set of cascading repercussions these days â€” you might win the late-fee battle and lose the universal-default war), or paying the fee to keep your record clean and good luck getting it back. Heads I win, tails you lose.

      Of course these days if you invoke any FDCPA or other rights, their response will probably be closure of your card, with the attendant ding to your credit score…

  2. trujunglist says:

    cancel your card. that’s how i dealt with that problem when capital one did the same thing to me.

    • Whtthfgg says:

      @trujunglist: Thats a dumb idea if there is a decent credit limit or long history on the card. Either/Both will effect his credit score

      • scoobydoo says:

        @Whtthfgg: The dumb idea is being a hostage to your credit rating. Yes, it’ll take a dip, but it’ll recover. I’d rather lose 20 points for a few months than stay with a bank that dicks around like that.

        Seriously, the whole “don’t do it because it’ll hurt your credit score” has to be one of the best things a bank can hear.

        • Amish Undercover says:

          @scoobydoo: A general fix would be to keep the card but just stop using it altogether. No credit hits plus not providing Chase with any profit.

          • catastrophegirl chooses not to fly says:

            @statgrad: from previous stories on here, i doubt that would stop them from charging him a late fee for not paying his $0 minimum payment

          • dhanson865 says:

            @statgrad: +1 to not canceling the card, paying it off, and stuffing it in a drawer. No harm to your credit score and no benefit to the lender that wronged you.

        • FormerlyAnonymous says:

          @scoobydoo: Totally. I’m glad someone else is calling people out on the credit score voodoo nonsense.

          My credit score is great and I haven’t really *used* credit in years. My secret? Paying off the balance on my one active CC every month, paying off loans well before they’re due, and not borrowing when I don’t need to. It’s not nearly as complicated as some have said.

      • lordmorgul says:

        @Whtthfgg: So just stop using the card for anything. I have several accounts open for years without a single purchase on them because the company did something unpleasant and I told them exactly why I would never charge anything to it again.

  3. YardanCabaret says:

    Also some are super shady on not only the day they change over but the time. My capital one card for instance is at 3PM EST or 12 PST where I’m at. I don’t know how many times I was late/early until I learned that it was a noon change over.

    • chocobo says:

      @YardanCabaret: Yeah, it’s ridiculous how they keep changing the rules and act like people are out of line for not keeping up with it.

      My mom has a Chase card, and she pays it on the 1st of every month. At one point they switched around the dates on her, and then gave her a $39 fee because no payment was received in the 30-day window of the 2nd to the 31st that month.

      Fortunately even the low level customer service rep was able to see that this is nonsense and waived the fee.

      • ShadowFalls says:

        @chocobo:

        Yes, it is also all in the matter of how you talk to the rep as well. If you are hostile, they have one less reason to assist you. If you are nice and explain the mix up and ask kindly regarding the situation, it goes a long way. I have had Chase change the due date before, I just called them up and asked them to change it to something more convenient for me and they did. Chase is the only bank that hasn’t given me a hassle on doing that.

  4. Devidence says:

    All the online options make this so easy to avoid now though. I just wait until it emails me with a new statement, then I schedule a payment. Pretty straightforward.

    Billing cycles have nothing to do with the payment due date. You have to look at statement date.

    • Verucalise (Est.February2008) says:

      @Devidence: I was thinking the same thing. Of course, I have a general idea of when my cards are due, and I go online to each account once a week or so to check and see if my bill is available.

      If you make a payment after paying your original bill, that goes towards the principal balance UNTIL the next statement arrives. You can’t automatically assume that by paying one day after the statement date that it goes towards next statement. I feel awfully bad for this person, but the company is correct and he can only hope that by reaching the higher-ups and explaining his confusion, they’ll have mercy on his soul.

    • duffman13 says:

      @Devidence: I have email alerts a week prior to when a bill is due, I pay it when I’m alerted. Haven’t had a late payment in 5 years since i started that.

  5. YardanCabaret says:

    3 comments and 2 mention Capital One. Nice job Capital 1 way to suck

  6. Xerloq says:

    Just set up a recurring reminder to pay every month on the same day. You’ll need to watch to make sure they don’t switch the dates on you, but then you’ll make one payment only per month.

    Oh, and close your account at Chase – if they’ll let you. I just got back from trying to close my account, and they said they don’t close accounts on Fridays.

    Shenanigans.

    • Chris Walters says:

      @Xerloq says Can I has Friday?: “Chase Won’t Let Customer Close Account”

      • Xerloq says:

        @Chris Walters: Seriously. I went to the bank to close the account because we had switched to a credit union.

        I asked to withdraw my funds and close the account. He processed the withdrawl then said “I can’t close your account today. It’s Friday. You just made a withdrawal and now I can’t process the closure. If we had closed the account first, I could have done the withdrawal afterward. You’ll have to come back tomorrow.”

        I asked for clarification, and received “It’s Friday and we can’t close your account. Come back tomorrow.”

        I would have asked for the branch manager, but I had my money in my pocket and I’m going to be in the area tomorrow so I’ll do it then.

    • ExtraCelestial says:

      @Xerloq says Can I has Friday?: they said they don’t close accounts on Fridays

      ROFL!

      I swear they have a board filled with ridiculous rules and excuses at their call centers and they just throw darts at it whenever they don’t feel like dealing with a customer. I thought I heard some good ones when I was trying to deal with a stolen card and fraudulent charges, but you clearly have me beat. I never thought I could hate WAMU more until they became Chase.

      • Heartless says:

        @TinkishDelight: No no no. I used to work at a call center. Those would be OSHA violations, not to mention I’m sure many worker’s comp claims.
        Instead, we use those Bingo ball cages, and roll them to provide a random excuse or explanation to your problem. Much safer, and more entertaining.

    • howie_in_az says:

      @Xerloq says Can I has Friday?:

      and they said they don’t close accounts on Fridays.

      What a coincidence — I commit arson and murder on Fridays!

    • catastrophegirl chooses not to fly says:

      @Xerloq says Can I has Friday?: i have a card with chase. my payment due date and statement date change by one or two days in either direction each month. seriously. sometimes it closes the 7th, sometimes the 9th. sometimes it’s due the 28th, sometimes the 2nd.
      they have no explanation for me but i assume because they want to catch me in this trap

      • Xerloq says:

        @catastrophegirl: That’s really messed up. My reminder hits in the middle of the month about a week after the cycle starts and a week before the due date. I’ve noticed it fluctuate a couple of days in either direction, but it’s never been that much.

        I’m glad I’m trying to leave… I hope they’ll let me close the account tomorrow.

    • Xerloq says:

      @Xerloq says Can I has Friday?: Oh, I know! Set up an auto bill pay to pay 1/28th of your minimum payment each day! Then you’ll never be late! Ever!

      naw, that wouldn’t work. It’s late and I need to go to bed. GMAT prep in the morning!

    • Verucalise (Est.February2008) says:

      @Xerloq says Can I has Friday?: GESD! THERE’S BEEN A CALL FOR SHENANIGANS!!

      WHERE THE HELL ARE YOU??

  7. Elcheecho says:

    this is exactly why i pay my cards twice a month when i check the balance. i have chase and amex and they’ve both almost caught me

    • Red Cat Linux says:

      @Elcheecho: I do this too. I schedule two payments a month, or evey other week. both payments are at least the minimum. If the payoff is close enough, I just write the whole thing and be done with it.

  8. mrsam says:

    Once again, I have to point out that the root cause of this problem is carrying a balance in the first place, by, most likely, buying stuff one cannot afford.

    I — and many others like me — would never find themselves in this situation because we don’t carry a balance and pay our credit card bills in full, each month.

    I do understand that, sometimes, life throws you a curve ball. You get stuck with unexpected car repair or medical bills. But this is an exception, rather than rule, as far as carrying a balance goes. Most people who carry a balance do that because they simply buy worthless crap that they cannot afford. And, banks make money off them, plain and simple.

    These words may be harsh, but they’re true. Banks have no choice but to generate revenue from people who don’t know how to manage their money. If you do know how to manage your finances, banks can’t make money off you, because you won’t let them. So, they have to go and squeeze as much as they can from those who live beyond their means. And they use every trick in the book to do so. And when those tricks work, and people get nailed by them, they complain. Such is life.

    • SirWill says:

      @mrsam: It’s my fault that I lost my job. A job that was paying me a good wage, and we were living in our means easily. No real debt. Lose job, expenses don’t go down as much as income goes down. Forced to use Credit or lose house. Get new job MONTHS later, not as much income, but we can make ends meet month to month. I now have debt on my card(s). I know I need to pay it off, but it takes time seeing as how I can afford all that much more than the minimum payments.

      All I am trying to say is that it’s not completely the card holders fault all the time. Yes, most of the time it is because of living beyond ones means, but that doesn’t mean it is always the case.

    • thesadtomato says:

      @mrsam: Wow! It took almost an hour after the credit card story was posted for someone to let us know how much better they are than the OP, the one poor schmuck who carries a balance on his card in the whole country!

    • bohemian says:

      @mrsam: The issue of the OP could have happened even if he was paying off his bal in full each month but charging things on an ongoing basis.

      Put your smug card away.

    • runswithscissors says:

      @mrsam: 2 thumbs down for the smug “better than you” OP blame.

    • ShirtNinja says:

      @mrsam: Wow, can I live where you live, where there are no such things as ‘emergency car repair’, or ‘parking at expired meter’ or ‘emergency medical care that my insurance doesn’t cover’?

      It sounds like a really nice place, so much better than this ‘real world’ myself and most other people live in.

      • TurnkeyDB says:

        @ShirtNinja: You forgot living in a state with unemployment >10% with my name on the list to.

      • catastrophegirl chooses not to fly says:

        @ShirtNinja: you also forgot ‘paying a medical cost up front and waiting for reimbursement from insurer/flex or health savings account’
        i just did that one for the root canal because the endodontist doesn’t take mastercard which is what my flexible spending account debit card is.
        they said they will make sure to get me reimbursed by march 2010

        • Xerloq says:

          @catastrophegirl: My flex spend provider doesn’t know how to reimburse without me using the card, and the ER doc I have to pay doesn’t accept cards at all. I’m hoping my HR rep can help me sort this out.

          • catastrophegirl chooses not to fly says:

            @Xerloq says Can I has Friday?: i’ve only had to work with my current one, tri-ad. their reimbursement form is on their website to download and print, then fill out, attach receipts, mail it in.
            it was about to be uglier for a while, in july they decided to stop providing direct payment to my mail order pharmacy. when i told my HR department that i couldn’t get my insulin without the money that the flex account was holding because it was already in the account and they wouldn’t let me pay the pharmacy directly…. it got fixed in less than 48 hours.

            i did have a problem like yours with a health savings account once [the kind for the high deductible health plan, not the flexible spending account kind, different rules] and snuck around it by paying for gas and groceries with the card and then spending the money i didn’t have to pay for those things out of my checking account on the medical bills. when they called me on it i sent them the receipt for the MRI showing that i paid cash. i never heard from them or the IRS about it again. but i don’t know if laws have changed in the last 7 years on that one.

      • SteveZim1017 says:

        @ShirtNinja: how do you put “parking at an expired meter” in your list of uncontrollable and blameless things?

    • Xerloq says:

      @mrsam: Medical bills are on my one credit card. My wife and I had separate ER visits within a month, each with an ambulance ride. We blew through our emergency savings (which covered one bill) but the other had to be paid because the hospital wouldn’t work out a payment plan because they were out of network and we weren’t residents of that state. We paid, and they sent it to collections anyway. Got the collections sorted out easily, but we had a couple of grand to pay off on the card… nearly done.

    • ajlei says:

      @mrsam: Well, I DO tend to think textbooks are worthless crap, but I’d like to get through engineering school so I can pay off my exuberant purchases such as… textbooks, bus pass to get to said school, oh… and the two plane tickets I had to spend a shitload of money on this summer when my dad died and the airlines tried to offer $500 one way tickets for bereavement fare. (Protip: go through Priceline/Travelocity; don’t even bother asking for bereavement fare.)

      Worthless!

    • s73v3r says:

      @mrsam: You are a classic ass who adds nothing of value to the discussion. I propose that people who take a “holier than thou” attitude toward anyone who has a credit card problem have their comment disemvoweled. Given the length of this post, that would be fairly entertaining.

    • TJ says:

      @mrsam:
      Seems to me the root cause is the Chase policy.

  9. morlo says:

    If you’re carrying a balance you’re already be screwed. Consider this fee a courtesy reminder.

  10. kyse says:

    I use to pay chase early, until I started noticing a trend with them (besides the fact they could care less if you pay early). I would pay when my next cycle started (a few days later actually), however they began taking their sweet time applying the minimum payment for the new cycle to my account. I actually began noticing a pattern, my next minimum payment would not show until either I made a payment out of the blue, or 2 weeks had passed. So I would be stuck in the same boat basically, owing another payment to them.

    This on top of the fact I reach India when I call CS for Chase, is really pushing me to consider closing the card. I don’t like feeling toyed with.

  11. ExtraCelestial says:

    A good way to combat this if you can’t make extra payments or be bothered to keep track of billing cycles and changes is to only pay the bill when a bill is displayed.

    • sharkzfanz says:

      @ExtraCelestial:

      I agree. If you cannot track it simply wait for it to say you have a bill due. This is what I do with my chase bill and I have yet to have an issue. Second chase took over providian and wamu accounts close to a year ago.

  12. esd2020 says:

    This is a good reason why you should sign up for Auto Pay.

    (as an aside, Chase’s autopay is pretty good — you can set it to only pay the minimum on the last day of your cycle)

    • ExtraCelestial says:

      @esd2020: No, autopay is an awful idea for any type of payment.

      How many horror stories must we read here before the world comes to terms with that? Set yourself a calendar reminder if you want to pay on the same date. As a very last measure do the auto-payment through your bank’s payment system but even that is a mixed bag.

      • Garbanzo says:

        @TinkishDelight: Reading this blog has changed my mind on autopay. I haven’t taken it off any bills I already had it on, but I haven’t added it to any new accounts I’ve acquired since.

    • Tiber says:

      @esd2020: Never. Ever ever ever ever ever. the couple minutes you save isn’t worth the chance for trouble. There are about a million free calendar apps out there. I personally use ReminderFox, since it’s right inside my browser.

      • ARP says:

        @Tiber: Unless, by autopay, he/she means that you set it up with your bank to automatically pay, not that Chase pulls from your account (so auto-push, not auto-pull). I use auto-push for a number of my bills.

  13. consum3rist says:

    So let me understand this…

    1. The guy has (say) balance of 100$.
    2. He pays 15$ way before due date – balance now is 85$
    3. He pays another 15$ before due date – balance now is 70$

    So how the heck would chase know he meant to pay for his next months min due in step 3. Shouldn’t he wait till he gets his billing cycle to roll to next month????

    • psm321 says:

      @consum3rist: He paid the second $15 _after_ the due date of the first $15, but before a new statement had been generated for the next period.

    • ExtraCelestial says:

      @consum3rist: Yeah I don’t think it’s all that underhanded either, but I can understand his frustration with them being so stubborn about removing the late fee after he explained the situation.

    • Chris Walters says:

      @consum3rist: You understood wrong.

      1. He paid his September bill.
      2. One day after that due date had passed, he paid his October bill.
      3. Chase said even though the due date for September had passed, he was still paying within that statement cycle so they applied it to that cycle, leaving October’s statement unpaid.

      • Verucalise (Est.February2008) says:

        @Chris Walters: Wow, I love how they believe statement dates are so arbitrary.

        ….if this is how they work, then I wonder how your 25 day grace period is calculated. Makes you wonder.

        • FormerlyAnonymous says:

          @Verucalise(countingcalories): The statement dates aren’t arbitrary. They’re well defined.

          • Verucalise (Est.February2008) says:

            @FormerlyAnonymous: Sorry, I must of misworded my statement. What I meant to point out was the fact that although the payment was made on the due date, then another payment the next day- the payment AFTER the due date still applied to that current cycle. Most people, including myself, tend to believe that if the statement date says I’m being billed from say 10/1-10/30 with a due date of 11/3 and I pay on the 4th- that it’ll be applied towards NEXT cycle, not current since it’s past the due date.

            • lordmorgul says:

              @Verucalise(countingcalories): If you pay late, you can incur a late fee, but still pay within the period and not have it shown as an unpaid debt (usually does not get reported to your credit report unless you get over 30 days late). Basically, it is a good thing for you that this is possible… if you just wait for your bill before paying it which seems like pretty common sense!

          • sharkzfanz says:

            @FormerlyAnonymous:

            Its the same.. You can check them.. Safe bet is pay once you see the bill generate.. Now hard.

  14. veronykah says:

    Why won’t Chase give the credit for the late fee?
    I’ve paid cc’s late on a few occasions and NEVER had a telephone rep not give me the credit.
    Is he emailing them this problem?
    If you call, act VERY contrite/confused/scared about the late payment and ask very nicely they will waive the fees and credit your account.
    I would wager it also helps to pay off your balance at said time, then don’t use the card again.
    This is my strategy.

    • jacques says:

      @veronykah:

      They don’t do that any more. They spout off a canned line about how the CARD Act has caused them to not be able to receive other income. And neither the CSRs, or the supervisors will budge, even when faced with closing the card. Maybe it’s a Chase thing. I’m much happier not sending them my money every month anyhow.

    • 67alecto says:

      @veronykah: Sounds like they just don’t want him as a customer if he’s gotten 3 written responses that they won’t take the fee off.

      Isn’t providian the card for people with horrendous credit? Could be a factor in why they won’t waive it.

  15. morganlh85 says:

    Definitely call…I’ve goofed up a few times and every time I call they remove the fee with no problems at all.

  16. Cant_stop_the_rock says:

    This is NOT a trap, it’s how all credit cards work. It doesn’t matter how many payments you made in the previous cycle (in this case two), you have to make the minimum payment during the current cycle. I’m shocked that a Consumerist writer doesn’t know this. Banks don’t do anything to “get you in the habit of thinking in terms of a payment due date.” On all of my credit cards’ websites the statement date is listed right with the payment due date and the current minimum payment due.

    • Chris Walters says:

      @Cant_stop_the_rock: “How all credit cards work” doesn’t mean it’s not a trap, as we’ve shown time and again with our credit card related posts.

      I understand the rules perfectly (go back and read the end of my first paragraph). Every credit card statement emphasizes your payment due date. That’s the important date; miss that and you’re screwed.

      As we and others have noted in multiple stories, credit card companies deliberately shorten the window in which you can make a payment, and they do this in order to generate extra fees from customers who miss the window.

      Once a due date passes, it’s natural for a consumer to assume the next payment he makes will apply to the forthcoming due date. As we have seen repeatedly (this isn’t the first story like this we’ve posted), this is a bad assumption to make. You have to wait for the next statement cycle to begin, or you’ll be sorry. The bank won’t do anything to remind you of this, so the burden is on you.

      That said, I believe Daniel is within his rights to ask Chase to make an exception and refund the late fee.

      • tamaracks says:

        @Chris Walters: While I can see how someone might think that, it doesn’t make much sense. The due date has nothing to do with the statement close date. If the statement hasn’t closed, you haven’t gotten a bill, and if you haven’t gotten a bill, how can your payment apply to it now?

        I don’t find statement cycles confusing. The only thing confusing me is why it’s news.

        • tamaracks says:

          Although it does seem like it’s pretty easy to get many CC companies to reverse the occasional late fee. But I bet calling will have far more success in that than an e-mail.

        • lordmorgul says:

          @tamaracks: I agree with you somewhat here… if you haven’t been billed for your card cycle it makes ZERO sense to be making a payment on it even if you’re trying to be more responsible and start ‘paying early’.

          Noone should ever pay a bill they have not been billed for.

          Pay at most a week in advance and do it online where you get legal confirmation that it was received on time! Keep every confirmation or get them sent by email.

      • Cant_stop_the_rock says:

        @Chris Walters:

        It’s absurd to imply that this is intended to be a trap. It would only be viewed as a trap by someone with a very poor understanding of finances. The bank would have sent him a statement that told him he had a payment due.

        Daniel was trapped by his own poor financial practices. He doesn’t understand how his credit card works, and he didn’t bother to look at his statement.

        Daniel is within his rights to ask Chase to make an exception, and I think it’s a reasonable request. It is not reasonable to accuse Chase of deception when they choose not to remove the late fee.

        • mac-phisto says:

          @Cant_stop_the_rock: i would consider charging someone a late fee for paying a bill a few days early a trap. i understand how credit cards work, but i’m not too proud to admit that i also fell in this trap once when i was younger.

          here’s why it’s a trap: look at one of your credit card statements. you should see a “payment due date” (let’s say it’s 11/01) & a “statement date” (probably 10/05). what you don’t see is “next statement date”. you get to guess that. sure, it’s probably 11/05, but maybe it’s 11/04 or 11/06. no one knows until after the statement!

          it’s entirely reasonable to assume that payments accepted after the due date will be applied to the next statement. why? b/c if you don’t pay by the due date, guess what does get applied to the next statement – the late fee! it will be levied the day after the due date, but even if you make a payment the day the late fee is assessed, your payment in the following period will still require an additional amount equal to the late fee.

          so, credit card companies can “forward” their late fee to the following period, but not your payment that you made a few days too early. yup, no trap here.

          • Cant_stop_the_rock says:

            @mac-phisto:

            The late fee goes on the next statement because all charges go on the next statement.

            There is no reason to believe that Chase (and every other bank) handles payments this way to trap anyone. That people do stupid things is not evidence of foul play by Chase.

          • nbs2 says:

            @mac-phisto: It sort of makes sense. Sort of.

            Let’s say you borrow $100 (no interest) from me. We agree that you will pay me $10 each month. You can pay off as much as you want each month, but you have to pay $10. This $10 is due by the 15th. If you pay me $10 on January 15th, and then $10 on the 28th, you have reduced your debt to $80, but you still owe me $10 for February. Just because you pay me $10 on January 28th doesn’t mean that you have made your February payment.

            Does it make sense? Sort of. Is it ideal? I guess it depends on whether you see CC payments like mortgages or HOA fees.

        • Verucalise (Est.February2008) says:

          @Cant_stop_the_rock: Heck, I’d pay the late fee as long as they didn’t spike my interest rate for a misunderstanding.

          • sqlrob says:

            @Verucalise(countingcalories):
            I wouldn’t count on it. When I moved Chase typoed the address, so I didn’t get a bill on time.

            They would waive the fee, wouldn’t waive the interest rate increase. I closed the card and refuse to deal with Chase now.

      • Cant_stop_the_rock says:

        @Chris Walters:

        It’s worth noting that this “trap” only “traps” people because of the existence of online banking. Previously people just waited for their statement to come in the mail and they mailed a check. Yet this practice of applying the payment to the current billing cycle existed long before the advent of online banking. That should make it clear to any reasonable person that there is no intent to “trap” you. This is simply a case of a person not adequately understanding how credit cards work. I really think they ought to teach this stuff in high school, because a lot of people are clueless.

    • henneko says:

      @Cant_stop_the_rock: Read the timeline… how can the payment due date (and thus the second payment made after the due date) possibly be within the current statement cycle? If his payment was due September 6th, the cycle MUST have ended at least a week (and probably 2 weeks) before… otherwise, where did the statement whose payment was due on the 6th come from?

      Is Chase claiming that there is some kind of ephemeral “Between” (my god, it’s full of stars!) after the August statement cycle and before the September one, during which payments don’t count? Or does Chase somehow send out statements before the statement cycle is over? In that case, do purchases made after the statement is printed but before the end of the cycle magically appear on the bill?

      No matter how you cut it, this is complete BS. The statement period is over, the payment goes on the next statement.

      • ExtraCelestial says:

        @henneko: Well, yeah. Kinda. The between time is used to calculate the interest owed. The new cycle reflects the new balance and new minimum payment. I have no idea how long this period is, or whether they actually need all that time to calculate percentages with current technologies, but I don’t think it’s unreasonable to make customers wait until a payment is due to make the payment especially when you consider that there are banks that charge for prepayment on loans.

  17. DanKelley98 says:

    Chase…once again demonstrating everything thats wrong with the credit card industry: the whole sign ‘em up and screw ‘em attitude toward their customers.

  18. kate2000 says:

    I had the same thing with my Chase card several years ago. Amazingly, the rep I spoke with was very helpful. They reversed the charges, and reinstated the interest rate and rewards program that got changed with the “late” payment. Hope you’re able to get your case worked out

  19. spankyshay says:

    I had this exact fee on my Chase account. I went the phone route and with a smile on my face I politely talked my way up the chain of command until they reversed the charge. I recommend to get on the horn.

  20. zzxx says:

    Thank you for financing my free ride (for now) on Chase. Last year I collected 5 $200.00 bonus checks. The bonus becomes $250.00 when you accumulate $200.00. I know that they are gonna get rid of deadbeats like me soon.

    You have to be a shark with the banks. Read everything. Be suspicious. Ask a lot of questions. Then you can join the ranks of dead beat free riders like myself.

    • Garbanzo says:

      @zzxx: The businesses you purchased things from financed your free ride on Chase.

    • lordmorgul says:

      @zzxx: Garbanzo is correct, and zzxx you must not understand how bonus/cashback/points systems get paid for. The bank is not funding the rebates, not directly anyway, the businesses that run your charges pay fees based on the purchase amount… it is those fees that pay for rebates and bonus programs (and those fees net the banks fairly small overall profits). The bank’s profits mostly come from interest and other fees and this is why they fought so hard against the new federal policies on fees and changing interest rates!

  21. TechnoDestructo says:

    The problem is, Chase will change your payment cycles, without telling you, repeatedly.

    Then they’ll lie about telling you, repeatedly.

    Get swine flu. Pay bills with cash. Blow your nose on the cash.

  22. haoshufu says:

    Not that they are unable to reverse the late payment fee, they are unwilling to. In this time that the government trys to block all sort of fees from banks, banks are getting more hard line about refunding anything they are legally entitled to and tell their people to stop being nice.

  23. zzxx says:

    Another new thread……

    This can help polish up your credit score. You probably never heard of this but I noticed it.

    My card has a line of 8000. Every month I use about 4000. Some months 6000. I get billed around the 28th of every month.

    They report the amount owed on this credit card to the bureau when (they think) it is at its highest, namely when they cut a bill. I noticed that and I pay the entire card off a few days before the bill is cut so that the account has a near zero balance when it is cut. This kept a card reporting (semi-legitimately) that I have 60% usage even though I pay it off every month.

    How come I never heard of this anywhere, even from this site? I think that plenty people have the ability to do this. This can raise ones credit score a ton. The credit score raise can be worth way more than the float value of a couple of thousand for 10 days (if you wait for the bill and pay it in full).

    I realize that cards do their best to band together to screw the customer but this????

    If you have a 5000 balance on a 15000 card that is OK. Then they lower that card to 5100. The other cards say, “Thank you brother.” I just like to screw them back.

  24. amberlink says:

    For once I agree with consumerist. Report these jackasses as soon as possible. They applied an early payment to a previous billing cycle. Um, what? How do we know which billing cycle we’re paying IF these asshats change it?

    I think chase should get the asshat of the year award.

    Come on, who’s with me?

    We can make a new slogan for them:

    “Chase, we’re asshats, and we know it.”

  25. wvFrugan says:

    I have health problems that sometimes cause problems with being able to manage financial stuff at specific times (like surgery with a long hospital stay). I once had someone take care of a few payments for me on stuff while I was going to be laid up. Instead of making 3 seperate payments on an auto loan for me, they just paid for all 3 months at once (not what I told them to do, because I know bankers are all thieves). Thanks Capital One Auto Finance for not understanding this nor removing the late fees for the 2nd & 3rd months when I called. So nice of them to generate 2 months of late fees on my paid ahead account! Fuck the modern bank, this is not capitalism, but exploitation of the GOTCHA!

    • Shivver says:

      @wvFrugan: How was Capital One supposed to know that you were paying for three discrete months and not just paying more than you owed to pay the loan off faster? While it would have been nice for them to remove the late fees, they weren’t under any obligation to do so.

      • ohiomensch says:

        @Shivver: When I pay extra on my car loan, or my student loan, or one of my credit cards, it applies to future payments unless I specifically tell them to apply it to principal. Sometimes it happens. You just have to check with your bank.

  26. LastError says:

    As Chase customer, I am familiar with some of their gotchas, but I gotta side with the bank on this. The guy screwed up by paying twice in one cycle and not at all in the next.

    By the due date, always pay the minimum.
    By the statement date (seven to ten days later), you can pay more if you want but you still need to have paid that minimum before it was due.

    And when the statement drops, it all starts over again.

    Whether the bank should do the nice thing and wave the fee is another matter, but honestly you’ve got to keep an eye on any credit card account these days and watch the “payment due” date and whatever amount due that they mention. Chase DOES tell you both things right on the main account page. I look at it at least twice a month for all my accounts.

  27. H3ion says:

    Quicken, and I’m sure any other financial management program, will set up a reminder so you know when to pay a particular creditor. You look at the due date and set the reminder early enough to make sure the payment will get there on time.

  28. Zain says:

    Would I be correct in assuming Daniel has been using Chase’s messaging system to contact them? If so, I would recommend he give them a call instead. The phone CSR’s are much more lenient than those who deal with internet messages.

  29. catastrophegirl chooses not to fly says:

    for some reason my chase amazon card just improved the reward offerings to include cash back or travel [for an additional booking fee of $25] instead of JUST amazon gift certificates.
    not that i minded the amazon gift certificates. i can always use more breeze pads for my tidy cats box.
    but now i’m scared of the other shoe…. they don’t just improve things without some benefit to them and i don’t know what’s in it for them yet.

  30. feckingmorons says:

    Best Buy did this to me once. I complained to them and they reduced the fee by half. That was not acceptable so I set up a medication conference with the Alternative Dispute Settlement Program of the County Court (free) They decided they would rather refund the rest of the fee.

    Now I pay them $1.17 every third month. I have a zero balance and after a few months they send me a check for the $1.17 I’ve overpaid.

    I have it on autopay through my bank. I could stop it, but why should I. I may actually use the card again some day when they have 12 months no interest on something I want at a reasonable price and I’ll want that credit.

    Or they will get annoyed and close the thing. Either is just fine with me.

  31. dognose says:

    How many idiots are carrying a balance on their credit cards? This is the number one piece of financial advice. Don’t buy stuff you don’t have the money for is my next piece of advice.

  32. wcnghj says:

    I say wait for the statement to cut, then send the payment the day you get the statement. Or go online and pay the day you get the statement.

  33. imsnowbear says:

    The due date is different from the statement date. What’s so hard to understand? It’s not unreasonable to expect the bank to need some time before the next billing date to post last minute transactions to the account, compute interest, etc. Admittedly, this is not intuitively understood, but it’s not a totally unreasonable practice, even if it does have advantages for the cc company.

    These credit card companies are so evil. They maliciously give you the opportunity to use their money for free (if you pay off the balance each month.) Then if you do carry a balance they are have the gall to extend you an unsecured loan with no payoff date. These unreasonable companies actually expect to be compensated for extending unsecured credit to high risk debtors who can’t be bothered to apply for low cost loans at their credit union.

    How dare they expect to charge you for such inconveniences? They are charitable institutions after all, aren’t they? On top of all this they force you to apply for and use their cards. It’s no wonder they are hated so much. Why in the world would anyone use a credit card?

    Using a card is like borrowing money from your local Mafia loan shark. Everyone should know this by now. But if you are going to do business with such people it behooves you to learn the rules you’re playing by.

  34. Cheapskate Brill says:

    Chase used to be really great, but changed their policies several months back. So here’s what you do. Note that only #1 and #5 may get your money back, while the rest are just revenge tactics:

    1. Keep complaining. Keep sending messages via secure message center. Keep calling. Escalate to whoever you can get on the phone or voice mail. This by itself will probably eventually work. Even boilerplate answers take time and money to send.
    2. If you can pay it all off, do so. Then pay an extra $1.00. Then ask them to cut a check. Do so every month(set up the payment automatically and the e-mail too if you can). This will cost them at least the cost of postage.
    3. Request new cards be sent. This costs them at least $1.00 per card.
    4. Ask them to mail you stuff. Terms, checks, whatever. Change your PIN every two days or make other account changes that result in a letter in the mail.
    5. Take them to mediation or court. Tell the rep you want mediation.

  35. micmuk says:

    AutoPay is the way to go. If your in deep to them just set it to min. payment. No matter how much they change the date on you AutoPay takes care of it. Every bill I have is now on AutoPay and never have to worry about it while traveling or on vaca. Use their own rules to beat them!

  36. Zuska says:

    My beef is the Bank of America. I get email alerts, and when I do, of course I go to the web site to pay the bill.

    However, if I wait until I get the reminder, no matter what I do the payment will be late!

    I have taken to the following strategy:

    I never use the same card for two months in a row, and one week after I make a purchase I go to the web site, and in spite of the message saying that no payment is due, I pay it anyway.

  37. lordmorgul says:

    Chase is a highly predatory lender and not a bank I would trust with a $5 debt.

  38. Bob Ramsey says:

    I’m confused as to why someone would pay their card like this in the first place. It just seems odd to me that you’d decide to make a payment on the first day of the next billing cycle? Why not wait until later in the cycle and get a few pennies in interest by keeping your money in the bank.

    I’ve read through my statements enough to know that even in the online banking age the charges, postings, and cycle timings can be weird.

    For example, Monday I purchase something from Amazon. On Wednesday, by billing cycle ends. On Thursday the item ships and Amazon bills my card. On Friday the charge actually posts to the credit card. So if I try to pay for that Amazon purchase on Tuesday, the CC company doesn’t even have a record of the charge yet.

    Using the company card at work I’ve seen up to 3 months go by between purchasing something online and having them show up on my card statement. I buy at the last day of cycle 1, it ships and is billed mid part of cycle 2, first day of cycle 3 it shows up as a charge from my specific account, and finally at the end of cycle 3 I have to hand in my receipts and explanation of all charges in cycle 3.

    I addition, every time I pay on-line, my bank puts up this huge warning that says that my payment may not be posted by the recipient for two business days. And I believe them because I’ve seen it happen that way.

    These payments, despite all of our expectations, simply don’t happen in real time. There’s a fudge factor involved just like there always has been. It’s why you never pay anything at the very last minute unless you are physically walking into the office and handing the clerk a payment.

  39. ohiomensch says:

    Because I had been caught in such a trap before I had been paying my credit card through online banking. I get paid twice a month so I would send the minimum payment every payday (approximately every 14 to 15 days) thinking that if one didn’t hit, the other would. Well because this particular would change its billing cycle each and every month – sometimes it was 26 days, sometimes it was 24 days, the due date changed, every single month and cumulatively after about four months there could be a difference in dates as much as 10 days.

    One month, 3 of my payments went into one billing cycle and the 4th missed the payment date by 2 days, incurring late fees and jacking interest up over 30%. Of course I closed the card and it taught me never to assume anything. I think when we use online banking we think we are safe, but the safest thing to do is to look at every single monthly bill and check for due dates and more importantly statement closing dates. those can be a week or more beyond your due date. These may be standard practice for the industry, but they are designed for your failure and their benefit.

  40. RickRussellTX says:

    I have to say, I’m with the credit card on this one. If every payment made at any time is to be taken as a “future period” payment, how to do we pre-pay or pay off our debt? It’s rather silly to think “if I pay twice in a row I’ll be covered for two months”. The only way to be covered for two months is to not carry a balance. If you carry a balance on a loan, you owe a specific payment by a specific date **each month**.

    Certainly the loans and credit cards I’ve used in the past have been crystal-clear-explicit on this point. Pre-payment doesn’t release me from making scheduled payments, unless the scheduled payments are $0.00.

    I suppose the banks could put a “pre-pay” or “future pay” checkbox on the payment form, but I daresay that would get more people into more trouble.

  41. PsiCop says:

    Pedantic quibble: the Govtrack page you linked to, shows how the House voted, not how the Senate voted. I wasn’t able to find the Senate vote listings on the site.

  42. nsv says:

    I have a TD (formerly Commerce) Visa card and somehow missed a payment last month. (If you take a nasty hit to the head, don’t be surprised if you start making big mistakes.) I called, they explained the problem, and I apologized, took full responsibility, and paid online while I was on the phone with them.

    They removed all fees and promised that it wouldn’t appear on my credit report. I didn’t even ask, they offered.

    Yeah, you can keep Chase. I’ve had my share of bad experiences with them.

  43. Graymalkin56 says:

    Why don’t the CC companies stop all this sneaking around and man up and charge what they really want to charge:

    1. Annual fee.
    2. Transaction fee ($1 or $2) every time you use the card.
    3. Processing fee ($5 or $10) every time you make a payment.

    Plus the usual late fees, refused check fees, etc.

    Yes, I’m being sarcastic.

  44. mattweitekamp says:

    Thats why USAA is the best bank on the planet, this kind of stuff doesn’t exist.

  45. kexline says:

    I find Chris’s guess interesting … I’m paid monthly, so I’ve been trying for months to get all my bills to cycle on about the 28th of each month. I’m running into two major hurdles:

    (1) Every CSR I have spoken with thinks only in terms of due date. It sounds like they can’t quite fathom wanting to pay a bill as *early* as possible. So they will happily agree to change my billcycle date, then change the due date instead. So I’m left guesstimating what billing date will get me the right cycle date, and it seems to vary widely.

    (2) Even though many billers have variable-length cycles, they won’t commit to cycle on a given day of the month. I think this looks even more like intentional fuckery than the delayed-billcycle part.

  46. BeFrugalNotCheap says:

    I’m glad people are starting to see the bullshit that chase does. They recently fired my ass for no good reason and you know what? I’m glad. Their practices were getting too shady for comfort.
    Another BS practice? Calling Customer service and letting the CSR talk you into getting payment protector. Since they have such a high quota and are under CONSTANT pressure from upper management, CSR reps have mutated into flat out swindlers. The con?: Double talk some poor sap into getting payment protector. The mark (the customer) agrees to it with out realizing it. The CSR not only gets to keep their job, but they get a nice fat BONUS at the end of the month! Profit! What does the mark get? They get a mysterious “charge” that they never see on their monthly billing statement. Months go by and they FINALLY see it and begin bitching about it. But alas, it’s too late. They have to live with it. Not only is it difficult to actually CANCEL payment protector, but sometimes customers will cancel only to have the charges show up the next month! LOL. Hey guys! Is’nt that HILARIOUS?!

  47. ollie8429 says:

    My car loan is through Chase and, even if I’m doing it way in advance, I just schedule each payment so it posts a day or two before the due date (I do this with all my bills, it’s my money, I may as well get the interest). Granted, I’ve never tried to do it over a month in advance, but it should be easy enough to do.