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Sunday, May 26, 2024   
 

Where did that fee come from?
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
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Scott Bilker

Howdy Scott:

I am writing to you about a unique situation that occurred about two weeks ago, and I was wondering if anyone else you know of, and/or subscribes to your newsletter, might have had this happen to them.

I currently carry a VISA card from Compass Bank, which is based in the southeastern portion of the US. I have had the card for a number of years and rarely carry any sort of a continuing balance.

I decided I wanted to payoff the balance, which at the time was approximately $48.03. I had not received my statement yet, so I went ahead, typed up a letter, enclosed a check for the balance-in-full, and mailed it off to Compass Bankcard's payment address in Decatur, AL.

When I checked the Compass Bank website 10 days later, I noticed that the outstanding balance on the card was $1.00. The first thought that came to my head was that I misfigured the amount of the payment for balance-in-full. Upon further examination, the dollar had been billed to my account as a payment processing fee.

I immediately contacted Compass customer service and asked them exactly what the fee was for. The representative told me that, since I had not enclosed the remittance portion of my statement, there was an added $1.00 fee for processing the payment. I told the rep I was ready to close the account, since I considered this a money grab. She went ahead and waived the fee. I asked her to pass along a message to her supervisor that there should never be a transaction fee for processing a payment.

Any thoughts?

John
The Twin Cities of Minnesota

John,

Wow! That is a new one! I have never experienced this nor heard of it happening to anyone else.

I’m not surprised though. Banks will try anything to squeeze another dollar (literally in this case) out of each customer.

You did the right thing by calling. Most people wouldn't call for one dollar, or even notice it! You are DebtSmart! That’s why it’s so important for everyone to carefully review their credit card statements--scrutinizing every charge and every fee.

You're right, there should not be a processing fee for simply leaving out the remittance portion of the statement. It's not like they didn't know who sent the check. The bank was essentially punishing you for trying to do the right thing (paying your bill). Well, more like finding a new way to rip you off!

There are some people that might say, “Scott, who cares about $1? Oh well, so what.” Yes, it’s only $1, but $1 per month is $12 per year. “So what again?” Well, 10 little oversights at $1 each, per month, is $120 per year. These seemingly small amounts can add up to a lot of cash, especially in terms of percentage rates: for example, a difference of 1% can equate to thousands of dollars over the life of repaying a loan. It all adds up to one thing, and that is, more money for the bank and less money for us. I want to keep that dollar.

I wonder if those who would say, “It’s only $1” would simply walk past a dollar bill on the ground. Would they pick it up? You BET! It’s the same thing.

You’re smart not to leave your dollars on the ground, because the bank will gladly pick them up!

Best,
Scott

Reader Comments
" Loved this article. I experienced something similar when I ported my mortgage to a new property last summer. I noticed that they had tacked on a $2.50 administration charge on each biweekly payment!! 26 payments a year x 5 years = $325. Needless to say I demanded that it be waived. Beware and protect your money, it's only going to get worse!"
--Julie
 
" This article helps to alert others about the low-down tricks the banks are attempting even with clients who pay their bills in a timely manner. Thank you for being here for us to communicate with others and to learn from you."
--Velma
 
" This article brought to my attention a very strange situation. However, by mentioning that, having paid the bill in full already, the fellow writing the article might have just chucked the bill aside and, with $1.00 on the account, come next month he would have been charged a $30 or so late fee on top of the stupid $1.00. FYI, Love the site. You don't just say "avoid credit" but rather use it responsibly and to your own advantage."
--Lisa
 
" I loved the article but extremely upset by it. I am sick and tired of banks trying to get over. This is absolutely ridiculous."
--Nichole Jefferson

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