WORDS

To preface this, I have a really good credit score (last time I checked it was 769).

The way I pay all of my bills is that I wait till my payday (the 1st or 15th of the month) and then I sit down and pay any bills that are due. This holds true with my credit card, which I rarely use. Using this strategy, companies usually get their $$ by the 5th of the month.

Well, after looking at my electronic credit card statement today I realized the bill due date is the 3rd of the month, so every single month that I have held a balance I have payed $39 extra, for God knows how long. Honestly, I have never bothered to look at my statements unless the balance owed looked unusual, which is obviously dumb on my part or I would have caught this sooner.

So I am kind of frustrated about this (which I know is my fault, but it would have been really nice for someone from Chase to call and say.... "Hey, do you know you're paying your bill 2 days late every month and thus adding an extra $39 to every payment?") Maybe this is wishful thinking but I know I have had companies in the past call if there was something funny going on with the bill.

Regardless, between this, the crappy interest rate, and the fact there are no rewards I decided to cancel the card. I called the dude and at first he was really nice, saying how I had been a perfect customer for 6 years and I shouldn't throw away all that good stuff on my credit report (he gave this dissertation twice). I politely declined both times, and then he asked why I was canceling the account, and I told him. I wholeheartedly admited it was my fault for not looking at the due date, but I told him I expected better customer service. They have no problem calling me almost monthly to try and get me to increase my balance or offering me more cards, but they won't inform me of extra fees I am racking up?

At this point he became really belligerant saying that I was going to be in trouble because I was closing an account after multiple late payments. I told him that was odd because 2 minutes ago he said I was a model customer. I also called him on his bluff, telling him that I had my Equifax and Esperian reports in front of me and they didn't mention any late payments (which was a total lie). I also told him my uncle was a lawyer and that he sent me documentation that says that nothing is reported to the credit bureau until after 30 days late (my uncle is a lawyer but I haven't talked to him in 2 years). This shut him up and he then told me he would be happy to close my account.

So my question..... does anyone know if payments that are 2 days late have any impact whatsoever on credit scores. I was 100% sure before calling him that it had to be over 30 days past due, but now I am not sure if he was just trying to scare me into keeping my account open. I know it can't affect it too bad because just prior to canceling I got approved for a $25,000 Mastercard with the lowest interest rate USAA offers. Anyway, thanks for any help.

2/2/2010 4:20:38 PM

I wouldn't cancel the card if I were you. It would affect your credit score. I would just keep the card active, but don't use it.

2/2/2010 4:26:39 PM

Quote :

"So I am kind of frustrated about this (which I know is my fault, but it would have been really nice for someone from Chase to call and say.... "Hey, do you know you're paying your bill 2 days late every month and thus adding an extra $39 to every payment?") Maybe this is wishful thinking but I know I have had companies in the past call if there was something funny going on with the bill."

Chase isn't going to call you to tell you that; that is how they make their money.

2/2/2010 4:45:20 PM

I agree with him^^ on not canceling the card. One of the major factors in your credit score is how long your credit history is. If this is one of your oldest cards, then your credit score could take a hit. Just pay your balance (or transfer it), then don't use it anymore, but keep it open.

From their perspective, it's not really reasonable or practical for them to proactively call the thousands of customers who might be a few days late from time to time, but remain "current" on their bill.

As far as late payments go, this seems to suggest that you are in the clear if the payments weren't over 30 days late.

http://credit.about.com/od/usingcreditcards/a/latecardpayment.htm

[Edited on February 2, 2010 at 4:50 PM. Reason : d]

2/2/2010 4:47:41 PM

Sounds like you got angry at someone inoccent for your own problem. If you would have just engaged a normal conversation with the person on the phone and listened to what they were saying, maybe you could have compromised.

^^^Agree. I would never close an account. If you were worried about your score from all those late payments, you'll be pissed about the decline of your score after cancelling. '

Sounds like you need to pay more attention to your money.

[Edited on February 2, 2010 at 4:54 PM. Reason : ]

2/2/2010 4:47:44 PM

wolfweb is shitting itself

[Edited on February 2, 2010 at 4:49 PM. Reason : double post]

2/2/2010 4:48:37 PM

Closing your account has only hurt you and your credit because it has damaged your credit to debt ratio. You should have just paid your balance and set the card aside instead of closing your account.

If you look at a credit report, it lists all of your accounts and shows your payment history. The late payments are listed as 30, 60, or 90 days late. A couple of days isn't reported and shouldn't have done you any harm.

2/2/2010 5:09:30 PM

OH SHIT!

[Edited on February 2, 2010 at 5:09 PM. Reason : double post]

2/2/2010 5:09:31 PM

Quote :

"I wouldn't cancel the card if I were you. It would affect your credit score. I would just keep the card active, but don't use it. "

If you do this: read every single piece of mail from the company - you may get slammed with an "inactivity" fee, or get notice that if you don't use your card a certain amount, it will be closed, or some other strategy to keep you from simply keeping it open without using it.

2/2/2010 5:17:32 PM

Well, you screwed yourself by closing the account. And by not looking over your statement (seriously, don't do that). Should've listened to the poor guy who was just trying to help you. You should call them back and beg them to reopen the account, I'm guessing 6 years is your oldest card and you'll be surprised at the hit your score will take once this factors in.

No, being 2 days late on your payment will not be reported to the credit bureaus (i think you have to be 60 or 90 days delinquent)

^there's an easy way to keep track of inactive cards without obsessing: set alerts for when the balance is over $1. That way if something gets fraudulently charged, or they 'slam' you with a fee, you will get e-mail notification. I have a dozen unused cards and have yet to be charged anything. The worst they've done is close one (without telling me).

2/3/2010 8:57:35 AM

1. if you're young ~<35 (or young in terms of credit) don't cancel credit cards. It's plain dumb
2. late payment penalties don't start until like 30/60 days.

2/3/2010 9:03:16 AM

credit cards are teh d3bil

2/3/2010 9:06:58 AM

Since we are talking credit cards I agree with what someone above posted. I had a credit card for several years that I closed so I could get outta debt and well a year later my credit score suffered greatly from having no credit cards and not having any history either.

On another note, I have a tweeter card I used to buy my TV right before they went out of business. Since its obvious I will never be able to use this card again is it really worth keeping open or should I just close this particular account. I have 2 other credit cards I use on a regular basis which both have equal or longer histories on them.

2/3/2010 10:40:21 AM

this is how credit card companies make their money - they view you as a great customer [/thread]

2/3/2010 10:45:45 AM

^^Shouldn't hurt you too much to close the Tweeter account. But you may find that they've already done it for you. That happens all the time when businesses close / change CC providers.

Quote :

"credit cards are teh d3bil"

they are what you make of them.

[Edited on February 3, 2010 at 11:37 AM. Reason : d]

2/3/2010 11:37:07 AM

two things I find odd with your story (not saying you made it up lol).

1) they usually don't charge a late fee except after the grace period which is like 14 days or so depending on the creditor

2) you are right on the 30 days reporting.

2/3/2010 11:42:19 AM

I get charged a late fee the day after the payment is due

2/3/2010 11:44:45 AM

^thats odd. It varies I suppose with creditors.

I know with my mortgage its after 14 days then I get a late payment which is how they setup the 'biweekly payment' I use. I make half a payment on the 1st and half a payment 14 days later. Which actually ends up being 1 month extra payment a year so it helps pay off your loan faster and save money in interest. But I also round up my half payment so it comes out to paying 2 extra months a year instead of just the 1. The full payment doesn't get credited to your account until the 14th.

I've also in the past had to pay a card a couple days late and haven't had any fees.

2/3/2010 11:48:51 AM

I think most mortgages, including my own, have a 14 day grace period. However, credit card companies definitely depend on charging late fees.

2/3/2010 11:59:20 AM

Quote :

"1) they usually don't charge a late fee except after the grace period which is like 14 days or so depending on the creditor"

Credit card companies charge down to the second, and they charge a rush payment fee if you pay at the last minute.

2/3/2010 12:01:41 PM

Thanks for most of the tips/advice (haha). I just realized I do have my credit reports sitting around the house because I just refinanced the house I own in Washington, and they don't have anything about late payments or anything like that.

And while I do agree in principle that maybe closing the account wasn't the best move in the big scheme of things, I also don't want to keep an account open that I will never ever use again. I may have a jaded perspective on credit/credit approval, but I have never had any trouble qualifying for any loan and getting it at the best rate. I can't imagine that closing one account with a 12.6 APR and no rewards and opening one with an 8.9 APR and a good rewards program could do that much damage, especially in the long term. I would think banks would look at my payment history on all my vehicles, my house, and other bills. Besides, I won't need any credit for a long while since I already have loans for both of our vehicles, my house, and this card.

But once again, thanks for the help.

2/3/2010 12:05:58 PM

Quote :

"^there's an easy way to keep track of inactive cards without obsessing: set alerts for when the balance is over $1. That way if something gets fraudulently charged, or they 'slam' you with a fee, you will get e-mail notification."

This does nothing to address the issue I was talking about.

2/3/2010 12:24:49 PM

I actually have a debt related question.

So thanks to you fellow tax payers and the fact that I bought my first home, I am going to have a chunk of change in the next couple weeks that I want to use to eliminate all of my credit debt.

Once I pay it off, how quickly does that impact my credit score? Is it immediate? random?

2/3/2010 12:30:47 PM

my guess is 30 days min. ?

2/3/2010 12:34:34 PM

In my searches ive seen 30, 60, and up to 90.

Then stuff like this

http://wiki.answers.com/Q/How_long_does_it_take_for_a_credit_score_to_improve_after_paying_off_credit_cards_in_full_and_none_were_in_collections

Anyone here pay any place monthly so you can monitor your credit? If so what service?

[Edited on February 3, 2010 at 12:43 PM. Reason : *]

2/3/2010 12:43:28 PM

Your closed account will stay on your report for up to 10 years, so you'll get the account age on there until it drops off. It's not as dire as people are making it out to be.

Also, you are correct in that they don't report until they are 30 days late.

2/3/2010 12:44:53 PM

^^american express, ~$12/month but it only monitors one bureau

[Edited on February 3, 2010 at 12:45 PM. Reason : ^]

2/3/2010 12:45:15 PM

My mom is in the mortgage lending business and she says that MOST creditors will not report a late payment unless it gets to MORE THAN 30 days late. If you're consistently 3 or 4 days late with your payments, the only thing you're doing is costing yourself late fees. Your credit score won't be touched.

Also, closing a credit account WILL adversely affect your credit. Best to just leave it open and not use it.

[Edited on February 3, 2010 at 12:54 PM. Reason : aha guess i shoulda read the rest of the responses ]

2/3/2010 12:54:20 PM

Quote :

"Your closed account will stay on your report for up to 10 years, so you'll get the account age on there until it drops off. It's not as dire as people are making it out to be. Also, you are correct in that they don't report until they are 30 days late."

sure, it'll show up on your report. But it doesn't factor into debt/credit ratio, or avg age of accounts. The 2 most important factors in your credit score.

2/4/2010 9:54:59 AM

It does factor into average age of accounts.

2/4/2010 10:02:17 AM

It counts towards your history (year your credit was established), but it is NOT factored into avg age of accounts.

if you don't believe me, pull your Equifax report. It shows you those stats upfront and you can do the math to figure it out.

[Edited on February 4, 2010 at 12:41 PM. Reason : d]

2/4/2010 12:40:28 PM

yeh, fan is right here... you need the credit line open for your ratio, not just history.

shawana, you are right that a closed account will help for history, but there's much more to it, so don't say that closing accounts doesn't really affect your score - it can big time. thus, if you're young, don't close credit lines!

2/4/2010 12:45:33 PM

Back in late 2008 I closed a card with a 31k limit on it that I started in May 2003 at a 1k limit specifically because they started trying to play games with the statements and statement dates (I have a lot of comments under Fail Boat where I am bitching about the FICO system and the ding that happens on your score.

My credit score went from ~760 to ~740. At the moment I have 2 $1500 cards and typically have 1k in outstanding balances because everything I spend a month goes on the card which is making the ratio look worse than when I had a 31k limit. Since you already own a home then it's really better to send a message to those fucksticks than to worry about those 20 points. Remember, they also get fees from merchants when you use their card. I was in the same boat as you and decided to just close it rather than worry that at some point they would hit me up with some sort of weird fees. I like the "alerts" idea, unfortunately that card didn't have an alerts system attached to it.

[Edited on February 4, 2010 at 8:23 PM. Reason : .]

2/4/2010 8:21:28 PM

i just realized that Truecredit (experian) completely changed the way they started doing their scores

i was wondering why it was telling me i was in the top 800s, i mean i know i was doing good but i knew i wasnt doing THAT good

so just a tip, if youve been paying for awhile for one of those credit monitoring programs (i have to for identity theft reasons) you might want to switch to someone who is actually using a FICO based system unless you just want to use whatever that company feels like basing their scales on

[Edited on March 6, 2010 at 1:32 AM. Reason : whew, my FICO is still very nice!]

3/6/2010 1:09:48 AM