I learned a very hard lesson today in late fees. My husband received an invoice in December for a toll road he was on some time in the fall. I told him I’d pay it, I forgot (in the midst of the holiday hustle and bustle) and we received a late notice. I sat down at my computer today to pay it online, and that started an experience I will share here so it never, ever happens to you.
The first problem was the invoice number. The system said it no longer existed. I tried it several times unsuccessfully and then picked up the phone to call customer service. They told me my late fee somehow went from $2.50 to $210.00 for a $10 toll. Needless to say, I was shocked. As if they were doing me a favor, they said they would discount that fee to $76 if I paid before some date in February. I spoke with three different people, and they would accept nothing less. At one point, I told them credit card companies had less questionable practices.
Truth be known, I haven’t decided how to proceed. If I pay the late fee, they win. If I don’t pay the late fee, I take my chances on whether or not they will send me to a collection agency and take further action. Either way, it’s an expensive lesson for anyone to learn (and a very shady practice for a company managing a tollway operation).
This whole situation got me to thinking about the true cost of late fees. How much money do simple oversights end up costing us? If I am doing the math correctly, my $200 administrative fee on a $10 initial charge comes to 2,000 percent. Thankfully, those big name credit cards are more regulated, but many of them charge 30 percent of more just on interest. If your payment is even one hour late (applicable if you pay online), they tack a late fee on top of that. The average minimum late fee is $25. If you pay it late every month, that’s $300 extra per year, per credit card, plus interest. How many credit cards do you have with a current balance?
It’s not just credit cards, either. My cellular provider charges late fees, as does my Internet provider, and so on. Even if it’s just $5 here and $5 there, that can quickly turn into $50 or $100 a month in extra fees.
Obviously, the solution is to pay your bills on time. I usually do, but December is a busy month in my house, and I forgot. I am at fault. I should have had a better system in place to avoid this oversight. I use online banking and automatic payments for almost everything, but I don’t have a good system in place for these random invoices that come through the mail. It looks like I have something to work toward in 2011.
What about you? How do you ensure your bills get paid on time, and what experiences have you had with late fees that can add to this conversation? Let’s use this opportunity to learn from each other.
I learned a very hard lesson today in late fees. My husband received an invoice in December for a toll road he was on some time in the fall. I told him I’d pay it, I forgot (in the midst of the holiday hustle and bustle) and we received a late notice. I sat down at my computer today to pay it online, and that started an experience I will share here so it never, ever happens to you.
The first problem was the invoice number. The system said it no longer existed. I tried it several times unsuccessfully and then picked up the phone to call customer service. They told me my late fee somehow went from $2.50 to $210.00 for a $10 toll. Needless to say, I was shocked. As if they were doing me a favor, they said they would discount that fee to $76 if I paid before some date in February. I spoke with three different people, and they would accept nothing less. At one point, I told them credit card companies had less questionable practices.
Truth be known, I haven’t decided how to proceed. If I pay the late fee, they win. If I don’t pay the late fee, I take my chances on whether or not they will send me to a collection agency and take further action. Either way, it’s an expensive lesson for anyone to learn (and a very shady practice for a company managing a tollway operation).
This whole situation got me to thinking about the true cost of late fees. How much money do simple oversights end up costing us? If I am doing the math correctly, my $200 administrative fee on a $10 initial charge comes to 2,000 percent. Thankfully, those big name credit cards are more regulated, but many of them charge 30 percent of more just on interest. If your payment is even one hour late (applicable if you pay online), they tack a late fee on top of that. The average minimum late fee is $25. If you pay it late every month, that’s $300 extra per year, per credit card, plus interest. How many credit cards do you have with a current balance?
It’s not just credit cards, either. My cellular provider charges late fees, as does my Internet provider, and so on. Even if it’s just $5 here and $5 there, that can quickly turn into $50 or $100 a month in extra fees.
Obviously, the solution is to pay your bills on time. I usually do, but December is a busy month in my house, and I forgot. I am at fault. I should have had a better system in place to avoid this oversight. I use online banking and automatic payments for almost everything, but I don’t have a good system in place for these random invoices that come through the mail. It looks like I have something to work toward in 2011.
What about you? How do you ensure your bills get paid on time, and what experiences have you had with late fees that can add to this conversation? Let’s use this opportunity to learn from each other.
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