Don’t Get Bit by Snakes
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I know what you’re thinking. What are snakes doing on a Christian Finance blog? Well, there’s a saying that says that if you play with snakes, you’ll get bit. Dave Ramsey even uses it to describe credit cards.
Well, I’ve got a great “bit by snakes” story for you. As many of you know, I’m on schedule to be completely debt free by next month. I’m still on schedule, but I hit a setback a couple days ago.
As many of you also know, I’ve been doing “credit card arbitrage” where I use 0% balance transfers and earn interest on the cash while using the cash to make payments. I don’t do this anymore, but I used a 0% balance transfer to pay off a student loan about a year ago and I made payments to a savings account to have the amount in a year so by the time the 0% was due, I would have the cash to pay it off.
Before last week, I never had a late payment in my life. But I played with snakes and got bit! When I set my online bill payment for the credit card, I looked at the next statement date instead of the payment due date and so the payment was late. When I realized what I’d done, it was too late.
I checked my credit card account online today and almost passed out! My account “went into default” with one late payment and my interest rate shot up to 25.99% even though it was still under the one year 0% special. They also charged me a $39.00 late fee and a finance charge of $89.25!
This really wasn’t a surprise to me since credit card companies can do practically anything they want because their agreements (that you signed when you got the credit card) allow them to. So I decided to give them a call. Sometimes you can get a lot accomplished with one phone call.
To make a long story short, I got the CSR (customer service rep) to waive the finance charges and late fee and also reduce the interest rate from 25.99%! I actually was amazed at how easy it was. All I had to do was ask a few questions about the charges and then simply ask if they could be waived. It took maybe five minutes!
I’m glad I got those fees waived, but I’m still going to pay off the credit card tomorrow. This was too close for comfort and I don’t feel comfortable carrying a balance when I have the cash to pay it off. I will never use credit cards again. Lesson learned. I hope you will learn from my experience. God bless!
7 Comments on this post
Trackbacks
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Brad @ enemyofdebt said:
Wow, they didn’t hesitate to bite you either. I write about this all the time, but your story is significant because you were on of the few who had the discipline but still got bit. One mistake or unexpected circumstance can change everything.
I love your blog and have subscribed!
July 24th, 2009 at 1:14 pm -
Henry said:
Yea, I thought I was disciplined, too, but I still made a mistake. It’s too risky for me. I’m going all the way debt-free and staying that way! Thanks for being a reader!
July 24th, 2009 at 5:03 pm -
Cash Back Card said:
Yes credit card companies love to throw in big charges for late payments. Certain cards are particularly strict on this. This is why it is important to read your credit card terms & conditions. Credit cards can be useful, but you do have to be very careful. I try to pay off my balance asap even if the bill was just paid the week before.
July 25th, 2009 at 11:33 am -
Brad @ enemyofdebt said:
That’s what we are doing too! Complete debt freedom from the chains of bondage. A lot of people consider that extreme but I totally see the value in not using other people’s money as leverage. The problem I hear people referring to is how it affects credit scores.
Since I do not wish to borrow any more money, my FICO score is meaningless. I call it a slave number because in order to have one you have to go into debt regularly. I currently do not have enough info for them to calculate a score. (We found out when we wanted to try and refinance.) I am ok with that!
We started with $25,000 in the beginning of 2008 and now have under $3,000 until we are debt free except for the house. We started strong, but had some life issues at the end of last year. My pay decreased this year so we have been crawling along, but we are still moving forward.
Good luck with your debt freedom fight as well! God Bless!
July 25th, 2009 at 2:08 pm -
Henry said:
Thanks brother. It looks like we both started our debt payoff around the same time. I started with about $22,000 worth of debt. Keep up the great work. You’ll be debt free in no time!
July 26th, 2009 at 3:24 pm -
book buy back said:
It is amazing what the credit card companies have been doing for the last year or so. You were lucky to have been able to get them to waive the fees and drop the interest rate. Normally you just get an I’m sorry and that’s it!
July 1st, 2010 at 11:12 am -
rent textbooks said:
HAHA this is such a good post!
September 9th, 2010 at 3:17 pm