American Express Late Fees to Rise in Wake of Feds Raising Credit Card Fee Restrictions

 

american express late fees

If you’ve ever made a late payment on a credit card, you know that it can result in significant costs in additional interest, as well as a cost to your credit score – but the immediate costs of that late payment are about to go a bit higher, with American Express announcing that the company will be raising its fee for late payments. According to Consumer Affairs, starting in January 2017, American Express late fees will rise to $38 for customers who are late on more than one AmEx payments within a six-month period.


Does this rate fee hike sound excessive? It’s actually not a huge change; the current late fee is $37. But this change in credit card late fees is part of a broader trend in the credit card industry of companies charging increasingly higher fees for late payments. If AmEx is any indicator, there might be other credit card companies that could raise their fees in 2017, as credit card issuers tend to follow other companies’ pricing and fee policies in order to stay competitive and profitable.

In 2009, in the aftermath of the financial crisis, Congress passed the CARD Act, which cut down on credit card fees and required issuers to provide more detailed information for borrowers to understand the full costs of credit – such as those letters that come with your credit card statement that explain how much interest you will owe if you pay only the minimum amount due for 3 or 10 years. The goal was to help consumers avoid excessive penalties and fees when borrowing money, while also helping consumers understand their rights and options. Average credit card late fees declined from $39 in 2009 to $35 in 2013, but credit card companies have started to increase their late fees in the past 4 years, as federal rules have relaxed the limits on credit card issuers.

Is the credit card late fee increase going to be a noticeable difference for most consumers? Possibly not: Consumer Financial Protection Bureau studies (cited by Consumer Affairs) have found that only 20% of credit card customers routinely get charged a late fee.

However, if you want to avoid incurring late fees, here are a few tips:

  • Set a reminder on your calendar (with notifications/alerts!) to pay your credit card bill – but check your statements carefully; many accounts have a different due date each month.
  • Make a minimum payment on time – even if money is tight and you cannot afford much, make sure you cover at least the minimum payment on any credit card accounts before the due date. You’ll still incur interest charges that go with carrying a balance, but you will avoid that pesky late fee.
  • Set up automatic payments – if you are paying off a large balance over time, set up a monthly automatic payment (if possible) to be applied to your credit card balance prior to the due date. This can help avoid late fees while chipping away at your overall credit card debt.

Late fees are one way for credit card companies to make money off of their customers, but you don’t have to let these fees affect you. With some careful planning and foresight, you can make sure that your credit card account stays up-to-date and free of late fees.

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Truebill Editor’s Finance Friday Picks, Edition 2: Must Haves, Reads and Do’s

truebill editor picks 2

Not that I’m the type to wear tinfoil on my head, but even I get nervous linking my bank accounts to different financial tools, and I work for one. When I was first interviewing for my job here at Truebill I naturally downloaded the app, but was very apprehensive – would my future boss have access to my bank accounts (he doesn’t)?! Would he be able to see the asinine things I subscribe to (he can’t)?! Would he judge me that my credit card statement is nothing but food, wine and dog clothing (he probably would)?!

It’s funny how I can be so protective of my money, while so careless at the same time. While I will scoff at any shipping on an item that’s over $5, my own company’s app reminds me every month how many random, forgotten domain names I’m still paying into. It’s actually quite embarrassing – how many domain names does one person need to let sit there for years on end?

Those sneaky money traps can get us at any moment because they take so many different forms. It’s not just fees and forgotten domain names (seriously, how much has GoDaddy made off of me over the years?), it’s friends, personal disorganization and even frame of mind that can be a money trap. Here are some of my favorite tips and resources to keep you on guard.

The Receipts Organizer and Tracker

I hate hate HATE having receipts. Especially when they’re floating around my car or bag, or when they manage to collect on my kitchen counter. I know they’re often necessary to keep around should I need to return something, but they drive me nuts. I have two tools I love:

Low tech: Knock Knock Receiptable Organizer

This handy little organizer has everything you need to keep track of both receipts and expenses.

receipt organizer

Multiple pockets with divider tabs and category sticker labels so you can even organize your receipts by category, and a spending tracker pad. It’s an all-in-one organizing dream.

High tech: Genius Scan from Grizzly Labs for both iOS and Android

This handy scanner will allow you to grab an image of your receipts and turn them into a PDF to save or print if you later need a hard copy. The coolest thing about Genius Scan is that it automatically isolates the receipt for you, and enhances the final scanned image so that it is easy to read.

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The Afford Anything Podcast, Episode #051

The Afford Anything Podcast is the brainchild of finance expert Paula Pant, who interviews scores of experts from entrepreneurs to psychologists, investors to artists, to talk to them about building an extraordinary life.

This particular episode hosted author, speaker and financial coach Mary Beth Storjohann, CFP®, who wrote Work Your Wealth: 9 Steps to Making Smarter Choices With Your Money. In this particular podcast, Pant and Storjohann talk about the book in-depth, and in particular, 6 types of “frenemies” that can sabotage your financial health:

Frenemy 1 – the “I’ll Get You Next Time”

Frenemy 2 – the “You Can Totally Afford This!”

Frenemy 3 – the “One Uppers”

Frenemy 4 – the “Pryers”

Frenemy 5 – the “Green Eyed Monster”

Frenemy 6 – the “FOMO”

They even do a little role-playing to model for you how to handle these budget-busting frenemies. It’s worth a listen to at least this one episode, but I’m willing to bet you get sucked into some of Pant’s other episodes as well.

Negative Visioning

We all know the idea behind the power of positive thinking and envisioning the things you want for your life. Negative visioning is the opposite – envisioning the outcomes you don’t want for your life. This may seem counter-productive, but as author Trent Hamm of this article about negative visioning for The Simple Dollar points out:

  1. It can bring relief by seeing that realistic outcomes, even if undesired, are usually not that bad.
  2. It can help bring to light any flaws in your current plan that may need to be re-assessed if you notice where they could get derailed.

Personally, I love the philosophy of including negative visioning alongside positive visioning because I am a natural self-saboteur when it comes to my own goals and I find I’m much more motivated by avoiding pain that I am by trying to achieve a goal.

For example, when I started saving for my very first emergency fund, I was much more motivated by the thought of what would happen if there was a medical emergency with one of my dogs or cats than I was by the sheer pride of having my savings goal in the bank. If I was tempted to blow any of my savings on something I didn’t need, it was much easier to talk myself out of it by thinking of that horrible feeling of not being able to pay an emergency vet bill.

The Live Richer Challenge Book

If a book could be a hand, then Live Richer Challenge: Learn how to budget, save, get out of debt, improve your credit and invest in 36 days by Tiffany Aliche would grab you by yours and lead you down an almost painfully easy path to financial fitness.

When I say “painfully easy,” I mean this book lays out a day-by-day plan for you to follow, over the course of 36 days. The steps are simple and won’t take too much of your time, and within a few days, you’ll already be feeling like a financial rockstar.

Overcome Your Money Story

Maybe you grew up with no money, or grew up with a lot of money but was taught it was a taboo subject – however you grew up with money, it has shaped the story you’ve created about money and affects your relationship with money. As financial planner and author Michael F. Kay wrote for Forbes.com, how your exposure to money growing up can profoundly impact what your relationship with money is now. If it’s not a good one, it’s crucial to identify why to help you overcome it.

I love this article because Michael walks through 7 vital questions to ask yourself to get to the bottom of your money story.

What are you some of your favorite tips for overcoming financial saboteurs? Leave me a comment below!

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The Details of the Lawsuit Against Comcast

comcast lawsuit

The news of a lawsuit against Comcast hasn’t come as surprise to many. We’d known cable company customer service was terrible for decades even before John Oliver told us about it in one of his famous expose pieces. When 24/7 Wall Street published their report of customer service satisfaction across 15 different industries, Comcast came in dead last for seven consecutive years, confirming what most of us already knew. It’s what happens when you have a virtual monopoly on a product everybody wants.

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