AUTO PAY=LATE FEE

Abrams1117 wrote on [Thu, 21 Jun 2007 04:08:02 -0500]:

Perhaps you need to get your terms straight. A purchase is not a fee. Maybe that's why you are confused.

A purchase is not a fee.

A minimum payment due is not a fee.

Sounds like you are only paying the minimum. You should pay in full.

A payment should be due based on the previous months statement, not current transactions.

Which credit card company?

My online banking instructions say to pay five business days before due date. That may cost a little interest, but avoids MUCH larger late fees.

Mike Morgan

There shouldn't be any reason for that in this day and age. Thumper

Thumper Not all businesses accept payment in electronic transfer form. When a payment needs to be sent to a business that does not accept payment in electronic form, the issuing bank mails a check to pay the obligation. The five business day advice is general advice, to cover the possibility a check will have to be mailed.

There's something wrong here. I am looking at a statement 'closing date' of 6/14, that's the night my bill is totaled for the month. I got the bill in the mail around 6/20, and it's due to them on 7/4 (yes, I know, a holiday, that's a different gripe). I have about two weeks after receipt of that bill to pay it. 20 days from the time it was cut. Any charges after 6/14 don't count until the next bill. Charges that put you over the limit during that time will still trigger penalties, however.

You might want to clarify your issue. And any autopay feature should (needs!) to be set for four days before the due date. Think about it, If you set a date of the 15th of the month, that can be a Saturday, and a monday holiday will put you three days late. I had a card that offered a

5% cash rebate on supermarket and gas, but they shortcycled enough (payment due too soon after bill was received) that I set an automatic payment for the day after the monthly bill was cut, just to be sure I'd never have a late fee. The couple times the regular payment was late, I only incurred a bit of interest, no penalty. (Too much of a pain, stopped using that card).

JOE

joetaxpayer wrote on [Sun, 24 Jun 2007 10:37:03 -0500]:

If the autopay is setup form the card site, i.e. the card issuer pulls from your bank account, it should never ever be late and you can only set it up to be paid on the due date.

Every business SHOULD accept payment in electronic form in 2007. Thumper

And I should have a pony.

In the real world, though, paper checks are still an essential means of payment in the US.

In certain other countries, things have progressed a bit (ie. Germany, Austria, Netherlands) (see, for example, the Wikipedia page on "cheques" and "The Future of Cheques").

Some interesting stuff.

(I suppose Paypal solves much of these issues, too, but I don't much like them and cancelled my account with them years ago - and getting my own money out of them was like pulling teeth)

Maybe so, but I can't make my insurance payments with a credit card and I don't see any reason for any other kind of electronic payment.

Elizabeth Richardson

State Farm will let you pay your insurance with them on line with a credit card. Genworth does an automatic debit to my checking account each quarter for my long term care insurance. I charge everything I can to my credit cards - some are automatic each month to the cc such as cable, internet and phones - and still being of sound mind I pay the cc bills on line each month in full. I have other utility bills which are automatic debits to my checking account each quarter. I have been trying to eliminate checks completely - I am down to about six per year! BeachBum(Jim)

Unfortunately, the management of such things tends to be messy. I do not allow anyone to pull money from my checking account (except, at the moment, my mortgage, but that'll change soon). I very much prefer to push money from my checking account (ie. electronic billpay).

That way I control all the transactions.

Automatic debit is nice in theory, but in practice, dealing with errors, turning it off, etc can be a huge pain.

Most checking account billpays nowadays, after you make the first payment to a given biller, can tell you whether they had to cut a paper check or were able to do a faster electronic transaction.

I prefer the 'push' as well. Having too many companies pulling money from my checking would seem a bit risky. If the OP had auto-pay with money pulled right out, how was any late fee involved? I never understood original issue completely. JOE

Well, I hardly think being able to charge the premium to my credit card is a good reason for changing insurance companies. Somehow, writing a check really isn't that much of an inconvenience. We go to the post office several times a week to pick up our mail. And, you get to see old friends there, too, occasionally. It's nice living in a small, remote town.

Elizabeth Richardson

As they say - each to his/her own - I do find writing checks inconvenient and a complication which should be eliminated in financial transactions. I try to charge everything to one cc, if possible, and "push" (as Joe says) the payment each month to the cc company. To further simplify things I allow the electric company, the natural gas company and LTC company to debit my checking account as the bills are due and have had no problems.

That is really, really, important. If some company's computer hiccups and pulls to much money, not only do you risk other bill payments failing, but the power is in the company's hands. They've got the money and you have to persuade them to give it back.

I know of one case where a guy had a cell phone company pulling from his checking. They pulled too much. He protested. Turns out the fine print said he only had 15 days to protest. It was slightly longer than that, so the company said "tough".

-- Doug

Under the Electronic Funds Transfer Act (1978), the customer must contact their financial institution no later than 60 days from the first statement which shows the error. If one calls (rather than writes), one may be required to submit information in writing within 10 business days.

One's loss for unauthorized withdrawals (usually meaning lost or stolen debit cards) is limited to $50 if you notify the financial institution within 2 business days, or as much as $500 if the error is spotted and reported within that 60 days. An error which sits on one's statement without being reported for more than 60 days may subject one to *unlimited* liability.

(that's all according to the law. Some banks give stronger protections to users of their debit cards, but it's unlikely that they'd offer stronger protections for outside-authorized ACH "pulls" - like having your gas company or cell phone provider auto-debit your account)

There's an interesting page at

some of this, and a little googling on"Electronic Funds Transfer Act" is also quite interesting. Anyway, while that "15 days" sounds a little suspect, the general gist of the story - which is that if one allows outside folks to pull $$ from your account (especially as opposed to you pushing it out), watch that bank statement *carefully*.

Well, the only debits I've allowed from my checking account were contributions to my Vanguard Roth IRA. It's nice that I can now have my withdrawals returning to it. Other than that, why don't you also charge your electric bill to your cc - that's what I do - we have no natural gas here.

Elizabeth Richardson

Also, you can check your bank account anytime on line as well as your credit card accounts. I quickly scan mine almost every business day and recently found an incorrect charge on my CITI cc from Paypal. They (Paypal) quickly corrected the error (?) before the credit card statement was issues.

BeachBum

The only debits I allow are for federal and state estimated tax payments. The IRS pulling money - now there's a scary thought :-).

But I initiate/control these - I tell them when to pull, and how much to pull. Nevertheless the transfers are structured as are pulls, not pushes.

I opened up a brokerage account, authorized a _onetime_ transfer to bootstrap the account, and the next thing I know, the brokerage pulled another $50 from my checking account. Fortunately, no harm done, but this is a good example of how these "authorized" debits can run amok.

Mark Freeland BnetOnewsX@sbcglobalnet