One of our readers, April, had this question:

I am 2 months late on two of my credit cards which started on an error on their part. Because I didn’t follow up on my end and call back before the next payment was due (I wanted them to correct my balance before I sent my payment), I am not sure how to proceed forward.

Card one (Limit: $500 min payment: $15; I usually send $50 ea. month), I sent that months payment in too early and they gave me a late charge which winded up putting me over my limit. I have another card with the same company that is in good standing.

Card two (Limit: $850 min payment: $30; I usually send in $75-$100) ea month). For some reason I made the payment online but they reversed it. I can prove that I had money to cover the payment in my bank account.

I have maybe been late with these cards once, twice at the most in the 3 years that I have been with them. I am able to pay $100 on each of them. They keep calling me. Should I answer and talk to that person or should I call on my own?

Thank you for your question April. If your credit card company is calling you to collect then yes, you can (and should) talk to them when they call. If they are calling you it means that you have already been sent over to the collections department. Since the collections departments often have the most leeway to negotiate with you, and you can afford to make a payment, then yes! Pick up that phone and begin your negotiations with them.

Now, you are going to lose a ton of time if you attempt to explain the situation, get frustrated, and attempt to have them fix the things that they messed up on.

You can go that route, but I have some different advice for you.

Since you have issues with two cards, let’s take them one at a time, and we’ll get this taken care of for you.

Issue #1: You paid your bill too early, and got dinged with a late payment and overdraft fee on accident.

Honestly, this happens all the time. I have done it once myself. The next time this credit card company calls you, stay calm, and go down this list:

1. Verify which credit card they are calling about - No sense negotiating until you are all on the same page.
2. Tell them you made a mistake and paid too early - This happens. Just be polite with them, all they really care about is that you make a payment.
3. Ask them to remove the late fee, and the overdraft fee for you - If they will not do this, politely ask to speak with a manager. If they hang up on you (and sadly that happens all the time too) just call the number on the back of your credit card, ask for the collections department, and start over with someone more helpful.
4. Remind them that you’ve been an excellent customer - Tell them that you will really hate having to transfer your balance to a different company, but the fees on the credit card are eating you alive.

   “I’d really like to make a payment with you today, but I need you to remove the late and over limit fees on the card for me first. They are just too high and I can’t afford them. Can you do that for me please?”

   Again, talking to a manager will yield the best results, but regular collection reps can do this too.

5. Ask to have your due date changed if you need to - If those payments are falling at an inconvenient time, see if you can switch them around. You might also ask if they have an automatic payment policy. That would simplify things for you in the long run if you are comfortable with it. (Not everyone is, I understand that!)

Now, if you cannot get anyone to remove those fees, do not make a payment. Wait a day, and call back to speak with a different manager. Someone there will be able to help you if you are persistent, I promise. There really is no point in paying fees of that type because it is so easy to have them removed. Better to use the money to pay down your total balance rather than seeing it sucked away into useless, accidental fees.

Situation #2: Your online payment was reversed

This is going to be similar to the situation above. Go ahead and talk to them when they call. Ask them why the payment was reversed. Be polite. Explain to them that you do have proof that you had enough money in your account to cover the charge.

I would suggest, rather than blaming them (even if it was their fault!) go ahead and say, “Well, ok, whatever happened, we need to get this account taken care of today so that I am no longer past due. If I make a payment with you today, can you remove the late fees and the reversed payment fee for me? They are awfully high, is there any way you can help me with that today?”

Again, just talk to a manager if necessary. The important thing is that you get your accounts caught up. Since you are prepared to make a payment on both of them you are in an excellent position to negotiate to get rid of the extra charges.

And, to answer your final question, should you talk to the people who call, or call yourself – you may have to end up doing both. Just don’t ignore the problem, because it will get worse. As long as you are speaking to someone in the collections department, you are good to go.

Best of luck as you get these resolved – a few minutes of politely asking them to remove the fees can save you a lot of money. Just remember that you are making the payments – you have the power of negotiation in that situation.

Thanks!
Mr. CC

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This entry was posted on Thursday, January 8th, 2009 at 09:45 and is filed under Credit Score Repair FAQ, Debt Reduction FAQ, Reader's FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.