Just wondering if anyone else has gotten a flyer with their credit card invoice. I just got one in my First Union, claiming they are discontinuing their pay ahead option. They want me to make at least the minimum payment, dah. What is that about? Doesn't every invoice have a minimum payment due box? Am I dense? http://www.creditsense.com
You're not dense. They are removing the option of skipping next's month payment if you paid more than the minimum the month before. Here's an example: your payment is normally 100.00/month and you make a 200.00 payment. On their old system, you could skip the next months payment because you paid 2x the minimum. With the pay ahead option removed, you must make the minimum payment each month, regardless of how much you paid the month before. Hope that helps.
Lena, my point was why bother to tell me that, they always give a minimum payment amount. If they don't specify "0" minimum due, they don't have to worry about a payment not being made. It seems to me like an unnecessary piece of paper, but then again, they are notorious for that. http://www.creditsense.com
Herb, Don't they have to notify you when they change terms. I just think they are following the law. Kelly
They're probably engaging in CYA, as well. People used to the pay-ahead program may reflexively not make a month's payment, thinking one isn't due. Then, Bam! Hundreds (or thousands) of complaints from people tagged with an unexpected late charge and a 30-day late on their CRs.
I agree with all of you, but the fact remains, the minimum amount due is clearly spelled out on the invoice, anyone not making this minimum payment would be charged a late fee and maybe and overlimit fee, this is one of the ways they make lots of money on credit users. http://www.creditsense.com
Perhaps it's just become a bookkeeping hassle for them, or perhaps they are having cash flow issues. In any case it's to the bank's advantage to encourage you to make only the bare minimum payment and provide you with a 'pay ahead' option for two main reasons: 1) If you are paid ahead, they can keep your account 'current' for several months for the purposes of the quality evaluation of their credit card receivables portfolio. 2) They make more money off of finance charges when people skip payments, but more importantly it increases the future value of their portfolio as they extrapolate what they are eventually going to earn based on people making just minimum payments on the amount owed. This makes their balance sheet look much, much better.
Thanks J. You raised some interesting financials. I don't think this flyer will discourage anyone from making large payments. Their statement smells more of a CYA than anything else. I was not ever aware of a pay ahead feature on these accounts. I have always been of the impression that a minimum payment has always been due. http://www.creditsense.com
Herb I'll use Discover as an example. I generally pay between 25-100% of the bill each month. For the past 2 years, my statements all read, "minimum payment due $0.00, optional payment $100.00". Basically, they are banking on the fact that most people will love to skip a payment because of previous overpayments. They benefit from this because the average daily balance is now higher, thus more finance charges. JP
That is truly unusual. When I got my first credit card (from Citibank,) I paid ahead once, just before the statement closing date. Then I made the required payment printed on the next statement, but included a note that said, "I already paid." Later, I got a calll at home from a Citibank rep, who told me that the payment was due anyway, and that I couldn't make payments in advance. I therefore assumed that all banks did it that way. That made sense, since as J. Edgar suggested, they want a minimum cash flow every month. I'm sure they also want to keep you in the habit of paying every month, so your account doesn't go bad from sheer neglect.
Exactly, the minimum payment amount is displayed on every invoice, even if it is zero, so all they have to do is not make it zero. The invoice I received the flyer in requested a minimum payment of "0". I guess, I'll have to get used to seeing something a little higher, i.e. $2.00, what a joke! http://www.creditsense.com
lena wrote: ------------------------------- You're not dense. They are removing the option of skipping next's month payment if you paid more than the minimum the month before. Here's an example: your payment is normally 100.00/month and you make a 200.00 payment. On their old system, you could skip the next months payment because you paid 2x the minimum. With the pay ahead option removed, you must make the minimum payment each month, regardless of how much you paid the month before. THIS Stinks
Later, I got a calll at home from a Citibank rep, who told me that the payment was due anyway, and that I couldn't make payments in advance. It's an advance Pmt. It's paying the next Pmt. early
Author: LB (---.proxy.aol.com) Date: 02-22-01 13:06 Later, I got a calll at home from a Citibank rep, who told me that the payment was due anyway, and that I couldn't make payments in advance. It's NOT an advance Pmt. It's paying the next Pmt. early
RE: Am I missing something? Author: RichGuy (---.library.arizona.edu) Date: 01-27-01 14:01 Later, I got a calll at home from a Citibank rep, who told me that the payment was due anyway, and that I couldn't make payments in advance. ================== =========================================== Reply To Message_ They are great at confusing`paying early with paying in advance!
