Bill Collectors (rant warning)

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Originally Posted by Bruno

Yes sorry that was a typo. I meant calls.
But why on earth would you do that?
I understand if you don't pick up AFTER the first time, but how on earth can people contact you for pressing problems if you don't pick up the phone?

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This is standard procedure for EVERYONE I know. Due to the high volume of random sales calls etc, I don't know anyone who picks up the phone for an unknown number. Usually if it's a "pressing problem" the caller is smart enough to leave a voice mail.

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payments for utilities like water, electricity, etc all expect to be paid exactly on time, for the exact amount. Otherwise the automated systems will require human intervention.

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This is an entirely different situation. You are paying a specific amount, as a cost for service. Not a balance on a loan.

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Originally Posted by Bruno

Banks can only accept money if they know it is coming and what they have to do with it. They are not old western style Scrooge McDuck vaults where the director takes a swim in the cash.

Banks accept millions of transfers every month via automated systems. Those automated systems can only handle money if they know what to do with it. They only know what to do with it if they expect it. They can only expect it if they know in advance when it will come, how much it will be and where it has to go.

Let's make the analogy with a Bakery. The baker needs x amount flour to make bread for a week. He gets weekly deliveries in order to have enough to support his business. The flour supplier can't just say 'hey, I know I am way too early, but here is your flour for the next 2 months'. The baker won't know what to do with that flour either. He can't accept it because he simply doesn't have the space to store it.

With bank payments, the problem is space as well. if money comes in way too early, the automated systems have no idea where the money should go. So they forward the transaction to a human being. This costs money. If thousands of people start doing this, the bank needs to hire extra people, just to process payments from people who fail to live up to the terms of the contract. If those people then also refuse to answer letters and phone calls, the whole thing get more time consuming and costly.

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I have 3 credit cards and a home loan, and for a short time had a car loan... I've never had a problem with any of them taking my money.
By your theory it would clearly be impossible to pay off a credit card every month, pay off your home loan before the term is up, or to pay off a mattress in 6 months, because all would require more than the "minimum" payment that the banks expect. I'm really confused at how you think paying early is such a problem.

Incidentally the one experience I had where I definitely screwed up regarding an early payment. When I got my first credit card I was trying to set up the online pay feature, but for whatever reason (I don't remember anymore) I sent a payment from my bank to the CC company rather than authorizing the CC company to debit my account. Somehow (again I don't remember why I did this, but it made sense at the time) I sent them a payment greater than my balance, and well before it was due. The payment posted to my account, and it showed a negative balance. I was a bit confused, so I called the CC company and got things straightened out for the future, but the early payment gave me a negative balance until I charged enough to that card to offset it. When I called the CC company rep said that since I sent it as a check (online bill pay from my bank sends a physical check), they just posted it to my account like they always would and since it was more than the balance it just posted a credit. Didn't make any comments that it was a problem, and they didn't charge some "early payment" fee.

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Originally Posted by gugi

It doesn't seem so complicated to me. $500 interest free for 6 months is about $2.50 in your pocket, if instead of paying immediately you put the money somewhere at 1% annual interest.
Whether it's worth going through a loan application, and then servicing that loan isn't for me to decide, as there are probably more important intangibles beyond the direct financial gain.

Since you're 24 hopefully you've learned a lesson - you have to understand the contract you're signing on and stick to the terms no matter whether they make sense to you or not. That's something to think about before, not after you sign on. The contract says they will send you a bill every month and you have to pay the minimum payment within a set period after that. You clearly failed to do it, hence the penalty.

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I can invest my money at about 10% not 1%, although there is obviously a bit of risk involved.
Regardless of that, yes I agree that I made a mistake, as I was unaware the payment had to be made AFTER a certain date. Anything I'd done before only had a "due date" not a "pay after" date. Obviously this was only relevant because it was the first statement period.
I work in a large (70,000+ employees) corporation and I'm aware how many policies and such make it impossible to apply logic and reason to a situation so I understand the caller was just doing his job. I'd just never encountered a situation before where paying early didn't count towards the minimum payment (though it did post against the outstanding balance).

In any event, I learned something, it didn't cost me anything other than a bit of frustration

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Originally Posted by bbshriver

I can invest my money at about 10% not 1%, although there is obviously a bit of risk involved.

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Well the moment you take a risk you turn it into something completely different from a simple arbitrage, so that's a very different thing. You are not very consistent in seeking profit though, obviously you are willing to forfeit about 18% of your gains by paying a month earlier than necessary (if somebody are good enough to play this game they should be good enough to not need a month of cushion time).

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Originally Posted by bbshriver

Regardless of that, yes I agree that I made a mistake, as I was unaware the payment had to be made AFTER a certain date. Anything I'd done before only had a "due date" not a "pay after" date. Obviously this was only relevant because it was the first statement period.

I work in a large (70,000+ employees) corporation and I'm aware how many policies and such make it impossible to apply logic and reason to a situation so I understand the caller was just doing his job. I'd just never encountered a situation before where paying early didn't count towards the minimum payment (though it did post against the outstanding balance).

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See, you're still not understanding the terms of your contract. You failed to make a payment BEFORE the due date. When you were sent a bill it contained a payment amount and a due date and you didn't make it. The fact that at some point in time BEFORE that bill was even generated you made a different payment is irrelevant, it has nothing to do with the bill you received and which you failed to pay. As I said it may seem strange to you, but logically it's perfectly sound.
There is a causality gap in your logic, you are attaching a payment you made to a bill you received after that payment was made, and they have to be time-ordered in the reversed manner. You probably expect that once you make payment you make should have an effect on subsequent billings and that's very likely still true but not to the extent you expect - may be if you hadn't made the payment you weren't required to make, the bill would've been for more than $15.

As far as logic and reason goes, their policies seem perfectly reasonable to me - in order to not alienate customers they forgive the first mistake, while still sending a rather strong warning. You didn't have to escalate the situation and find a person with the authority to override the penalty due to your specific circumstances, it was automatically dropped for you.

It just seems that your frustrations came primarily from your misunderstanding of your obligations, rather than from some inherently odd terms of the contract.

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Originally Posted by gugi

Well the moment you take a risk you turn it into something completely different from a simple arbitrage, so that's a very different thing. You are not very consistent in seeking profit though, obviously you are willing to forfeit about 18% of your gains by paying a month earlier than necessary (if somebody are good enough to play this game they should be good enough to not need a month of cushion time).

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I'm 24, and this is the first time I've borrowed money (other than house and car loans which are much more straightforward). I think it's fair to say that I'm still learning "the game".
On the same token, I could make the minimum payment every month and then pay off the full balance at the end of 6 months. For my personal budgeting, I prefer to deal with fixed amounts every month rather than compensate for single large expenditures. I like to keep my budget as constant as possible.

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See, you're still not understanding the terms of your contract. You failed to make a payment BEFORE the due date. When you were sent a bill it contained a payment amount and a due date and you didn't make it. The fact that at some point in time BEFORE that bill was even generated you made a different payment is irrelevant, it has nothing to do with the bill you received and which you failed to pay. As I said it may seem strange to you, but logically it's perfectly sound.
There is a causality gap in your logic, you are attaching a payment you made to a bill you received after that payment was made, and they have to be time-ordered in the reversed manner. You probably expect that once you make payment you make should have an effect on subsequent billings and that's very likely still true but not to the extent you expect - may be if you hadn't made the payment you weren't required to make, the bill would've been for more than $15.

As far as logic and reason goes, their policies seem perfectly reasonable to me - in order to not alienate customers they forgive the first mistake, while still sending a rather strong warning. You didn't have to escalate the situation and find a person with the authority to override the penalty due to your specific circumstances, it was automatically dropped for you.

It just seems that your frustrations came primarily from your misunderstanding of your obligations, rather than from some inherently odd terms of the contract.

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The failure on my part was not understanding the May 5 date. I only looked at the "due date" not the statement date. There was no previous bill to this, and May was my first statement, so as far as I knew, I made a payment before may 28th. Like I said, this was a result of this being the first bill. Later billing will be more straightforward.

The payment I made was intended to be the first payment due May 28, I didn't have any way of knowing I had to wait until AFTER May 5th to make the payment, since I didn't have any previous bill to base the billing cycle on. When I did get the bill, it never occurred to me that the payment had to be made AFTER that date.

However, you are correct in that typically I do make my credit card and home payments immediately after the statement due date. So it was a bit of a breach of logic on my part due to confusion in the first billing cycle. Since I hadn't received a bill I made the payment just in case I'd missed it and specifically didn't want to be late.

lol, take a look at your bill. i'm almost certain that it contains the total amount that you owe the date the bill was generated.
notice on that bill that your payment has already been accounted for.
for the exact same reason while your $75 payment is equivalent to 5 minimum payments, it doesn't count as if you have already made those future payments and absolve you from paying the next five bills, right?
it's very simple and straightforward - every time you get a bill you either have to pay it, or if you think it's erroneous you have to contact the billing entity and clarify it.

as another example credit card companies have a few days between a payment due date and when the next bill is generated. any payment made within these few days is past due for the previous bill and doesn't count towards the next either, so it just reduces the total amount of debt but doesn't affect any penalties for not paying on time.

and yes you should wait until the due date on your bills and only pay the minimum payments on any interest free loans, otherwise you're throwing away money. if you want simplicity not getting into loans when you don't have to is the way to go :)

I just checked my bill. Indeed you are correct it shows my $75 payment, so I should have looked more carefully.

However it does NOT list the amount due to pay off within 6 months. A home loan and car loan list an equal payment every month over a set "term" to pay off the balance. This bill lists a "minimum due", and paying the minimum would pay off the bill in 4 years rather than 6 months.

As I said earlier in this thread, I made a mistake and didn't read the bill as carefully as i should have. I only verified that I made my payment before the due date, and that my payment was more than the minimum amount. It never occurred to me to check the statement date and be sure my payment was made after that date. I saw that the bill had a minimum of $15 and due on May 28th.

You mention credit cards having a short amount of time between statements. I'm aware of this, but recall, this was my FIRST statement on this account so I wasn't aware of the billing cycle when I made my first payment. Just out of curiosity, I checked my home mortgage statement, and there is no 'dead period' like that. The statement date is the 2nd of the month, and the due date is always the 1st of the month.

Yep, I should have read more finely into the fine print on the loan contract, I get that. I thought it was a 6 month interest free loan, when in reality it is a credit card with a 6 month promotional period. I was expecting home/car loan type statements. Now I know differently, and I know to watch out for this in the future.

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Originally Posted by gugi

lol, take a look at your bill. i'm almost certain that it contains the total amount that you owe the date the bill was generated.
notice on that bill that your payment has already been accounted for.
for the exact same reason while your $75 payment is equivalent to 5 minimum payments, it doesn't count as if you have already made those future payments and absolve you from paying the next five bills, right?
it's very simple and straightforward - every time you get a bill you either have to pay it, or if you think it's erroneous you have to contact the billing entity and clarify it.

as another example credit card companies have a few days between a payment due date and when the next bill is generated. any payment made within these few days is past due for the previous bill and doesn't count towards the next either, so it just reduces the total amount of debt but doesn't affect any penalties for not paying on time.

and yes you should wait until the due date on your bills and only pay the minimum payments on any interest free loans, otherwise you're throwing away money. if you want simplicity not getting into loans when you don't have to is the way to go :)

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