I Missed A Credit Card Payment Now What? – Tiller Money Saved Me!
My worst fear happened this month. I missed a credit card payment. Yes, as someone who tells you to follow the golden rule of credit cards, I know that I messed up. I didn’t follow my own rule but don’t write me off yet. I didn’t do it on purpose so allow me to explain.
Before I do, let’s talk about why credit card debt is so dangerous. Did you know that there is over $1 trillion worth of credit card debt in the United States alone? Basically, if you are walking down the street, every 4th person you meet has credit card debt. That’s a sad, scary fact and one that can be 100% avoidable.
Maybe the scariest part of credit card debt is the interest. Credit card interest, which ranges from 15-30%, also compounds daily, which makes credit cards (when used inappropriately) a ticking time bomb of debt.
Credit card debt, much like student loans, causes crippling effects on an individual’s finances. I almost got caught, almost. You see, this can all be avoided if you follow the golden rule of credit cards:
Pay off your credit cards in full every single month and never carry a balance.
So why didn’t I do this? What happened? How could I break my golden rule?
Here Is How It Happened
It all started when I woke up to my daily transaction summary from Tiller Money. If you haven’t seen yet, Tiller Money is how I manage my money. It’s like an app but better and updates all of my finances every single day automatically. As you’ll see in the email snippet below, I have 11 linked accounts and doing that manually used to take me hours. Tiller Money does all that for me now, saving me time and headaches.
If you are interested in trying Tiller for free for 30 days, then click the button below. Or if you want to learn more click here to go to a YouTube video I did about Tiller Money.
Anyway, I got this email and the only thing on it was a Late Fee. A late fee? I’ve never paid a late fee in my life! Who was charging me a late fee?
Honestly, I was caught off guard so I immediately started going through my account to see who had charged it. Well, as it turns out, it was a late fee from a credit card I had recently opened, but why?
After 30 minutes of investigating I couldn’t figure it out so I had to call customer service, something I always dread. We live in a world now that is continuously pumping out products but it seems like the quality of customer service has exponentially declined. Maybe that’s just how I see it. I’d be interested in hearing your opinion on the customer service you’ve used before.
I dialed the toll-free number for American Express and was answered by a bot. Click two for this, three for that. I don’t know about you but I hate these things so I usually press 0 until I get connected to a real person. Finally, I got through and the lady on the other end of the phone was extremely helpful. Kudos to you American Express.
She kindly let me know that she saw that charge and I asked why my payment hadn’t gone through. She replied, “Sir your autopay is not set up and you didn’t pay your bill”. What? How could my autopay not be set up, I pride myself on automating everything.
After some quick investigating, I saw she was right. How could I forget something so simple and important? Long story short, I set up autopay (as you should too), paid off my bill, and they refunded the late fee. Crisis averted.
But that’s not where the story ends. Two days later, I get another automated email from Tiller.
This one came the day after Christmas and it seemed somewhat normal. I bought gas, got paid a dividend, and paid a fee on a mutual fund I’m invested in. But the top charge, the one that says Interest Charge, that was out of the norm.
I immediately knew that it was the interest being charged on my late credit card payment.
To be honest, this is when it truly hit me how dangerous credit cards can potentially be. I paid off the card 3 days late and it had already racked up $24 worth of interest. That’s insane. Now imagine spreading that out over a couple of months or a couple of years. I now understand why some credit card debt is so crippling, people have to file for bankruptcy.
As with the late fee, I called Amex up and in 5 minutes the interest charge was dropped. I also confirmed that they would remove this from my report so it wouldn’t affect my credit score. They kindly confirmed they would do it and that was that.
What To Do If You Miss A Payment
We are all going to make mistakes here and there but how you respond to those mistakes is what’s important. I had no idea what to do since I missed a payment and I freaked out a little. In the end, the freak out wasn’t necessary but only because I took care of it promptly. If you do miss a payment here are 4 things you should do immediately.
- Pay Off The Balance You Owe – First things first, you need to pay off that balance, in full, as soon as possible. Don’t put it off a day or two because that interest is compounding every single day. It adds up quick.
- Call Your Card Provider – The second thing I would do is call your card provider and talk to someone about getting any fees or interest waived, as I did. If you have a history of always paying on time and this is your first mess up, then it shouldn’t be much of an issue.
Call your provider and explain what happened. If you haven’t done step one already, then you can go ahead and do it here as well.
- Set Up Notifications – Use the tools the bank offers you and set up notifications to let you know when your payment is due. It’s possible to get all of your bills on the same day, say the 1st of the month. Most people don’t do this, so don’t worry if you pay on the 10th or 26th. As long as you’re paying your bills, you’re good.
At the very minimum, turn on notifications. Whether this is through email, text, or snail mail, stay informed and on top of your bills.
- Turn On Autopay – Speaking of the tools banks offer, use autopay! This is where I made a critical mistake so don’t be like me. Most, if not all, credit card providers offer a setting that will autopay your balance from a connected bank account.
This usually takes 5 minutes to set up and it will save you a ton of time and money in the future (speaking from experience here).
- Watch Your Credit Score – The last thing you may want to do is watch your credit score. If you go the route I did and pay everything off, get all the fees and interest waived, and confirm they aren’t going to report it, then you should be fine.
Personally, I’m going to keep an eye on things and make sure they did what they said. Luckily, if they don’t hold up their end, you can put in a request to remove something you think is wrong from your credit report. It will just take a little time.
The Bottom Line
At the end of the day, this didn’t turn out to be as big of an issue as I thought it was going to be. When I woke up and found out who had charged the late fee, I was sort of expecting my credit score to drop to 0 (which isn’t even possible). This experience drives home the point that you need to pay off your credit cards in full every single month without exception. If you are working towards financial independence, then getting rid of debt like that from credit cards is a must.
I pride myself on only sharing my thoughts and opinions on things I actually put into practice and this honestly made me feel a little bit like a failure. The lesson here? We all make mistakes every now and then and I’m no exception. Money mistakes, even when they’re small, can turn into a big problem. That’s why I’m glad you’re here, taking the time to learn how to make fewer mistakes.
What I am very thankful for is Tiller Money and American Express. I’m usually highly critical of companies and don’t expect much from their customer service teams but both of them have been exceptional.
Before I end this article, if you want to try out Tiller Money for FREE for 30 days then click here. Also, check out my favorite American Express card. This card has given me over $1,500 worth of value in just the first year.
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