Credit Card Payment Question

Redthistle(8)October 26, 2008

Hi Folks,

I'm working to pay off my credit card completely and that should be a reality next month. Here's my question:

Every 3-4 months, if I have extra money, I send in an extra payment. This month I sent in an extra payment two weeks ago, but my extra payment didn't cleared so I called the credit card company and asked if they had received my check but just hadn't processed it. They told me "no."

Now, I've been debating whether or not to put a "stop check" payment on this check. I hate to do that if somehow they do have it or get it in the next few days.

I mentioned this problem to a friend of mine who told me that, in this economy, some credit card companies hold off applying payments to peoples' balances so they can gain as much interest on the money as possible. My friend thinks my credit card company will apply my extra payment when my next payment is due. Have you heard of this?

Mind you, I will still send in my next payment when it's due, BUT then if they cash both of my checks I will overpay them. I'm really not sure what to do.

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rick_mcdaniel(Lewisville, TX)

Sometimes things do go amiss, but normally, the check is more likely sitting in an "in basket", waiting to be processed to your account.

On the other hand, we have all seen the 40-50-60 yr. old mail, that the PO comes up with, now and then, that was never delivered.

Once, I sent some mail right after xmas, which never arrived, and later found out that an entire bag of mail, for that destination, had been put into an "extra mailbag" storage facility, after the holidays, full of mail.

There is no end to the stories about the US mail service, and even the mail carriers themselves, who have simply put mail in their attic, rather than deliver it.

    Bookmark   October 27, 2008 at 10:47AM
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Thanks for responding, Rick. The check actually cleared--FINALLY! I just wonder where it was for 11 working days?--Maybe sitting in the "in" basket of my Visa company.

I've read recently that a lot of funky things are going on with credit card companies, but for the past 4-5 years that I've had my card, my payments have always posted quickly until now. This shouldn't be a problem much longer as I will have them paid off completely at the beginning of next month.

Like you, I've read stories about the postal service not delivering mail for years.--Kind of scary when we depend upon them so heavily.


    Bookmark   October 29, 2008 at 12:40AM
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rick_mcdaniel(Lewisville, TX)

Yup. I have a package right now, that was shipped from Santa Fe on the 21st, and is trackable. So far, it doesn't show ever leaving Santa Fe. Priority mail, of course.

You are certainly doing the right thing to eliminate credit card debt. We are doing the same. The consumer has entirely too much debt, today, and this economy is going to really do damage to those who don't reduce their debt.

I have mused that the growth in the economy has been almost entirely from consumer debt, over the last 30-40 yrs. Kinda scary, when you consider that was the primary cause of the Great Depression. At that time, people were actually borrowing money to invest in the stock market. No wonder it crashed.

    Bookmark   October 29, 2008 at 10:49AM
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pjtexgirl(7b DFW)

Wow Red! Long time no hear!!! I wouldn't put it past the credit folks to do anything rotten! I agree with Rick on doing a good job elimnating debt from cards:).

I love it when they offer me 10% off my first purchase to get a card that will charge me 21% interest for everything I buy from then on using the card. The first time I heard it I actually asked them if they were kidding.
Stores have people at the door to harrass you into getting one of these stupid cards unpon entry. They harrass you again that the checkout counter. It's insane! I always reply that I don't "do" credit cards. Some persist with some bogus cr*p about 0% interest for a year. Like I still won't have bills that need to be paid in 365 days between then and now. If I can't afford something now what's going to change?
I don't own my house(afford it on one income not too bad) and we have a student loan I think was worth the money. It almost doubled our income and the payments are about the same as my water bill. I have a plan to have the house mortgage and the student loan paid off in 15yrs. Hopefully my plan will work! PJ

    Bookmark   October 30, 2008 at 7:11PM
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liz_h(7/8 DFW Texas)

Most credit card & mortgage payments are handled by the "lock box" department of a bank. The same employees handle payments for several different companies that contract for the service. (They don't mix the mail. They process in batches.)

Normally they process very fast, but every so often something goes wrong. A mortgage company I worked for once received a payment that we surmised had floated around the bank for about a month before being forwarded to us.

    Bookmark   November 3, 2008 at 9:08PM
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DH discovered that a credit card he had was cancelled. Not for anything wrong he did...he pretty much payed it off every month. The company that owns that card is just doing away with that card and a couple of others. My guess? That particular credit card tended to target minorities more than most. I think there was too much debt piling up and with the economy tanking, they were afraid the whole company would be wiped out. And he did have trouble with them not crediting his payments in time. He would have to call them and try to get it straightened out.

    Bookmark   November 22, 2008 at 4:14PM
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PJ and anyone else who refuses to "fall" for the 0% interest hooks: All you do is purchase the item and pay it off as you normally would pay off any debt. For example, i bought a car from Chevy at 0% interest for 60 months. they told me that if I didn't make a payment the company would begin charging interest and I'd still have to pay for it. Little different from a credit card, but the 0% interest just means that the only thing I'm paying for is the car. the minimum payment was $333 per month so I send $400 and will have it paid off well before the 60 months mark. It's a good deal. The second good deal I got was from JC Penney. I bought a living room set for 2k. They offered me 0% interest for 18 months to put it on my JC Penney card. This is a good deal too, but YOU HAVE TO MAKE THE PAYMENTS. That's where a lot of people get into trouble, they think if they're not being charged interest they don't have to make a payment. You have to pay for what you buy, but if you can get the 0% interest, you only pay for the item, which I don't mind at all. And it IS a good deal.

As far as mortgages, you just can't get out of their interest charges. Or can you? I have a 15 year mortgage at 5 7/8% on my house that I got in 2001. I send in additional principal payments every month, just as much as I can afford,usually $200-400. In the past 7 years I have paid off over half of the total mortgage. If you look at an amortization schedule for your mortgage you will see that in the early years of your mortgage most of each months payment goes to interest. As time goes by it gradually swings back the other way, so that by the last several years of the mortgage life, most of each payment is principal. But if you are paying down your principal faster, your mortgage is getting paid off faster and you will save all of the interest you would have paid on the last several years of your mortgage. This can amount to thousands of dollars saved, and you are debt free that much sooner. You also build equity more quickly so that if you do have to sell it before it's paid off, you will get more back out of the sale. That seems like a good deal to me. Cheryl

    Bookmark   December 11, 2008 at 5:19PM
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maden_theshade(8 - Austin)

Can you do your banking online? We do online bill pay and that takes away the worry of our check being lost in the mail. You can also see exactly when you paid your bill last, and how much went out. Bank of America has a nice system set up.

On the other hand, it would not surprise me one bit if your CC company delayed processing on purpose. When I bought my first house, the mortgage company wanted me to pay them $300 to sign me up for a program where I would make two monthly payments instead of one. This was supposed to help reduce the interest. But my question was, why should I have to pay them $300 when I can just mail them a payment twice a month myself? I asked them that. Their response was I was free to send in two monthly payments, but they would not apply the second payment towards the principal or some other nonsense until the next month. In short, they wanted the interest to build up. Now I understand they have to make money...but c'mon. So I do like Cheryl now and just add on to my monthly payment. Even if I just round it up to the next five dollars, every little bit helps.

    Bookmark   January 9, 2009 at 6:50PM
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The mortgage company makes even more money when they sign you up for those twice monthly payment schedules. My MC sent me a letter about that and the enrollment fee was also $300. But the two payments added up to more than my present monthly payment. Their explanation was that a partial payment resulted in 14 days additional interest being added to the total monthly payment. But that plan isn't designed for someone who can afford to make their monthly payments. It's designed for folks who are on fixed income, have all of their bills coming out of their accounts on the first of the month and don't have enough to cover the one big one (the mortgage) all at once. For some people it can be a Godsend. However, you do (they do) wind up paying more over the long haul.

The mortgage company doesn't want you to pay off your loan early, because they make money on the interest that you pay. Likewise they cannot tell you not to send additional principle with your monthly payment. This information is in your original loan documents, but if you don't understand them yourself, get a lawyer to explain it to you. Your bank actually may have someone who will look at it and explain it to you free of charge. And yes I do all of my banking and bill paying on line. All the banks' on line bill paying systems are similar, so it's actually not difficult to change banks if you get better service from one than another.

The best thing about paying bills on line is that they post on the date that you specify when you send the payment. If you mail a check, you never know precisely when it arrived, all you will have is the cancellation date stamped on the back when the mortgage company posted it. When you mail a check, the mortgage company can claim they didn't get it by the due date and charge a late payment penalty. Banks and mortgage companies routinely post debits in the morning and credits in the afternoon. So if your account has $100 on Monday, then you make a deposit of $50 Monday afyternoon, you won't have a balance of $150 until Tuesday afternoon. But if you leave the bank and go pay your light bill for $101 on Monday afternoon, your check will bounce on Tuesday morning. Then you owe the bank the $25 overdraft fee on top of everything else.

So what I can't figure out is if banks are supposed to be so good at managing money, making money and gouging money out of Jane Q. Public, why are Janes tax dollars being used to bail out the @#(*&@# BANKS??????????

I think if a business is such a poor manager of their assets that they go broke, why would we want to help them stay in business? It's the taxpayers money that they have squandered to get where they are right now, why does the government want to give them some more? OK, I'm hot about this bailout program and while the President is a compelling speaker, I'm not convinced that this is going to help the country at all. And using tax dollars to shore up private business is wrong.

Maybe I'll start a business that will provide a service to every American politician: An Iron-Clad Guarantee to Go to Heaven. They only cost the individual politician 1k and then he/she can do anything they want to for the rest of their lives becuase they know they will spend eternity sitting on a cloud. This is an essential business to America because right now there are only 7 politicians in heaven, and none of them are Americans. We want our politicians to be represented in heaven, so I figure they all need one of these guarantees. So if Congress grants me 1.2 billion dollars, I will issue enough guarantees to cover all our major politicians and many of the minor ones. I might even be able to cover some of the ones who are in prison right now. Course I'm going to need a bonus (like the big bank bosses got) and a nice hotel to live in (like Dallas mayor wants to build) and a corporate jet (at least as good as the one Lee Iaococa has) in order to complete my mission. Yeah, I figure 1.2 billion should cover it.

But first I'm going to register myself as a minister of a church (that would be the church of IDM) so I don't have to pay any taxes anymore.

    Bookmark   February 10, 2009 at 11:13AM
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