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American Morning

Tips on Avoiding Credit Card Fees

Aired September 04, 2003 - 09:21   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, ANCHOR: Pay now or pay later. Millions of credit card users choose the latter and as a result late fees have increased in the past five years, going back to 1998, by an average of 56 percent.
Penalties also on the rise while grace periods are shrinking, we're told.

What, then, can you do to try and avoid these credit card traps? David Bach, the author of the "Finish Rich" book series, including "Smart Couples Finish Rich," "Smart Women Finish Rich." Everyone smart finishes rich, apparently.

David is with us back here on AMERICAN MORNING. Nice to see you.

DAVID BACH, AUTHOR, "FINISH RICH" BOOKS: Good to see you.

HEMMER: Good morning.

Fifty-six percent...

BACH: Unbelievable.

HEMMER: ... in five years? How does that happen?

BACH: One out of three dollars a credit card company is making today is coming in late fees. Isn't that amazing?

HEMMER: Yes. They're getting us, aren't they?

BACH: See, they're not making money on the interest rate. They're making money on the late fees. So that's why you have to be smart about this.

HEMMER: OK. You've got some tips today. Let's go ahead and tick them off. No. 1, read your statements.

BACH: You've got to read...

HEMMER: Should be common sense here.

BACH: You've got to read the statements because they're burying your late fee inside that statement. Those late fees used to be $10 and now as high as $39 a month. Average family has got nine credit cards and if just a couple of those are late a month, you're looking at almost $100 a month in late fees.

HEMMER: Average family has nine credit cards?

BACH: Incredible, isn't it?

HEMMER: Time to get out the scissors and start chewing some up.

Ask to have the fee waived. News to me. I didn't know you could do this.

BACH: If you get a late fee, you read your statement and you find it, all you've got to do is call your credit card company and say, "Hey, guys, wait a minute. That's not acceptable; I want that fee waived."

Here's what you can do. Pull out your statements for the last six months, see if there's any late fees, call them up and they'll waive them all, if you ask.

HEMMER: All right. Beat the due date by five days. Why five days?

BACH: OK. If the due date is the 15th and you pay your bill and get it on the 15th, most credit card companies are now applying that payment the next day, counting it late, hitting you with a $39 late fee.

HEMMER: So then if you're late, call and flag the account.

BACH: Yes. If you know you're going to be late, what you can do is call the credit card company, say, "Hey, I mailed the check. Here's what I want you to do; flag my account, don't give me the late fee. Take the supervisor's name and number."

HEMMER: I think this goes back to the first point. Know the grace period. Know your account.

BACH: You've got to ask them. Some companies have no grace periods. Some have as many as ten days. The key thing is they're always changing it, which is why you've got to read those statements every single month.

HEMMER: Is there one way, one most effective way to lower this rate?

BACH: Absolutely. Call the credit card company today, ask them, "What are you charging me?" If it's 14 percent interest today, tell them, "Look, I know I can get a zero percent interest credit card. I want you to lower my rate today to below five percent."

HEMMER: Can you do that?

BACH: By speaking to a supervisor. Don't talk to the first person on the phone. Talk to a supervisor. The answer is yes.

HEMMER: You've got to shop around, too. Web sites, where can people go if they're at home or at work today? BACH: Three great web sites: LowerMyBills.com, CardWeb.com, Bankrate.com. All of these Web sites rank the best deals on credit cards you can find right now nationwide.

HEMMER: Great news to know. Thank you, David. Great to see you.

BACH: Good to be here.

HEMMER: David Bach. All right.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired September 4, 2003 - 09:21   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, ANCHOR: Pay now or pay later. Millions of credit card users choose the latter and as a result late fees have increased in the past five years, going back to 1998, by an average of 56 percent.
Penalties also on the rise while grace periods are shrinking, we're told.

What, then, can you do to try and avoid these credit card traps? David Bach, the author of the "Finish Rich" book series, including "Smart Couples Finish Rich," "Smart Women Finish Rich." Everyone smart finishes rich, apparently.

David is with us back here on AMERICAN MORNING. Nice to see you.

DAVID BACH, AUTHOR, "FINISH RICH" BOOKS: Good to see you.

HEMMER: Good morning.

Fifty-six percent...

BACH: Unbelievable.

HEMMER: ... in five years? How does that happen?

BACH: One out of three dollars a credit card company is making today is coming in late fees. Isn't that amazing?

HEMMER: Yes. They're getting us, aren't they?

BACH: See, they're not making money on the interest rate. They're making money on the late fees. So that's why you have to be smart about this.

HEMMER: OK. You've got some tips today. Let's go ahead and tick them off. No. 1, read your statements.

BACH: You've got to read...

HEMMER: Should be common sense here.

BACH: You've got to read the statements because they're burying your late fee inside that statement. Those late fees used to be $10 and now as high as $39 a month. Average family has got nine credit cards and if just a couple of those are late a month, you're looking at almost $100 a month in late fees.

HEMMER: Average family has nine credit cards?

BACH: Incredible, isn't it?

HEMMER: Time to get out the scissors and start chewing some up.

Ask to have the fee waived. News to me. I didn't know you could do this.

BACH: If you get a late fee, you read your statement and you find it, all you've got to do is call your credit card company and say, "Hey, guys, wait a minute. That's not acceptable; I want that fee waived."

Here's what you can do. Pull out your statements for the last six months, see if there's any late fees, call them up and they'll waive them all, if you ask.

HEMMER: All right. Beat the due date by five days. Why five days?

BACH: OK. If the due date is the 15th and you pay your bill and get it on the 15th, most credit card companies are now applying that payment the next day, counting it late, hitting you with a $39 late fee.

HEMMER: So then if you're late, call and flag the account.

BACH: Yes. If you know you're going to be late, what you can do is call the credit card company, say, "Hey, I mailed the check. Here's what I want you to do; flag my account, don't give me the late fee. Take the supervisor's name and number."

HEMMER: I think this goes back to the first point. Know the grace period. Know your account.

BACH: You've got to ask them. Some companies have no grace periods. Some have as many as ten days. The key thing is they're always changing it, which is why you've got to read those statements every single month.

HEMMER: Is there one way, one most effective way to lower this rate?

BACH: Absolutely. Call the credit card company today, ask them, "What are you charging me?" If it's 14 percent interest today, tell them, "Look, I know I can get a zero percent interest credit card. I want you to lower my rate today to below five percent."

HEMMER: Can you do that?

BACH: By speaking to a supervisor. Don't talk to the first person on the phone. Talk to a supervisor. The answer is yes.

HEMMER: You've got to shop around, too. Web sites, where can people go if they're at home or at work today? BACH: Three great web sites: LowerMyBills.com, CardWeb.com, Bankrate.com. All of these Web sites rank the best deals on credit cards you can find right now nationwide.

HEMMER: Great news to know. Thank you, David. Great to see you.

BACH: Good to be here.

HEMMER: David Bach. All right.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com