Jon tried. And they explained.
August 22, 2009
Jon paid his credit card late and incurred a $29 late fee.
In fact, apparently, it was worse than that. Jon never opened his statement when it came in the mail. Jon’s dad found it, panicked, and paid it for him. But it was still paid late. And, of course, neither of them told ME about this until AFTER I saw his next statement and blogged about it.
Money matters can always be a cause for humor, can’t they?
Jon was upset about the late charge. So was I. But he paid his bill late (or rather his father did!) and he incurred the consequence which has been laid out by the credit card company. But Jon wanted to do something about it.
I suggested that Jon call the credit card company and ask for that the charge be reversed.
And he did. He called Citibank and asked that they reverse the late fee charges. I taught him once again that when you call a vendor with a complaint, you need to provide a satisfactory resolution that you would like to receive and you need to provide the reason why they should meet your request.
Jon wasn’t sure what to say when it came to, “Why?”
I suggested that he tell them that it was a mistake and that he is learning how to use credit cards and that his family members, in total, bring a lot of business to Citibank. Jon didn’t let me listen to the phone call, but he told me about it afterward. I asked him how they responded to his request. He said, “They said they would mail me a letter.”
Ah, the letter. We, with financial experience, know that ‘the letter’ means they are gonna say, “No” but that they want to get a little space between them and you before they say, “No.” So I knew what was coming. But I didn’t tell Jon. Remember, this is a learning experience.
The letter came from Citibank today. I opened it and showed it to Jon. As he read it, I stood patiently and watched him read it. Remember, this is a learning experience. I wanted him to learn from that letter.
The letter was actually very clear and concise.
“We regret that we are unable to remove the late fee charged to your account. A late fee is added when at least the minimum amount due is not received by the due date.
“To avoid being charged a late fee, we’d like to share a few simple but important guidelines that have helped other cardmembers:
” - Send all payment early enough to arrive on time. This means mailing them at least 5 to 7 days before the payment due date shown on you statement.
” – Include your account number on you check or money order.
” – Always make at least each minimum payment when it is due, rather than waiting and paying a larger amount late. Paying by the due date avoids late fees and risk to your credit record.
“We hope you will find these suggestions helpful and we look forward to continuing to serve you.”
Jon read the letter and he understood it. I had explained the rules to him when he first got his credit card. And we read the terms and conditions when he first got his credit card. But he has gotten older since then. And this letter was much clearer than those terms and conditions. And, as always, we typically get our best lessons by making mistakes.
But I am proud of Jon. He tried. And they explained.
And he learned a lot. And that is the whole point.
Justine
You all know that this is a blog where I chronicle my adventures in teaching my kids about money. I started out writing about things I understood well. But now, as I learn, I write about my adventures to help others learn even more.
Hannah, my daughter, is moving to France in a few days. She will be living there for a year, without returning home. Hannah has a few prescription medications that she takes so she needs to stock up on those to take with her to France.
Hannah took her prescriptions to get them filled at the local grocery store, which is where our family normally fills its prescriptions. Hannah soon learned that the medicines were going to be very expensive. The prescriptions are very expensive because our family recently moved to a health care savings plan, which allows our family to significantly reduce our health-care premiums but as a result, we pay for more of our health care expenses out of our own pocket. So Hannah’s prescription is now very expensive.
Hannah, being the self-sufficient teenager that she is, took the prescription to the first pharmacy herself. The pharmacy called her soon after and told her that the price of the prescriptions medicines would be fairly high. I love that the pharmacy didn’t call me. They called HER. Hannah came to me and asked what she should do. Hannah has such great familiarity with money and budgets now that she also knows that one hundred or two hundred dollars is a lot of money to spend on a prescription.
Our answer to Hannah was that we would pay for the prescription, since doing so under our smaller premium plan was still cheaper than the prices, in total, under our old health plan. But we told her she had to shop around.
We gave Hannah some guidance. We told her to call the likely suspects: Target, Walmart, Costco. And Hannah did just that.
Hannah learned that our local grocery store would be the cheapest on one prescription but that Costco would be the cheapest on the other two prescriptions. She came and gave us that information. And then she followed through. She called the grocery story pharmacy and asked the pharmacist to fill one prescription but not the other two. Hannah picked up the unfilled prescriptions and, with the help of her dad, took them to Costco and got them filled.
Hannah found the lowest cost prescriptions and saved our family some money. She learned to shop around and find the cheapest price on exactly the same product. And she learned more about how crazy our health care insurance system is here in the United States.
I am very proud of her.
Justine
Jon thinks that managing money is no fun.
August 14, 2009
Jon’s credit card statement came today. Jon is out of town on a camping trip. Hannah opened the statement, thinking it was hers. But she discovered it was Jon’s.
I looked at the statement. There is a late charge. My heart sank. My thirteen-year-old son just doesn’t use his credit card enough to want to deal with a $29 late charge.
Yes, the rules are changing come January. Maybe there won’t be these outrageous charges for being late with credit cards starting then. Frankly, I can’t remember.
But that’s not the point.
Jon called me just now and I told him about the charges. He was clearly upset.
He said, “How much is that per day?”
I noted that a late fee is charged to your account if the payment is just one day late. It’s just a lump sum. Jon thought that there would be some kind of penalty per day. He thought it was unfair that his payment was four days late and he has to pay $29 in an assessment for being ‘late.’
I agree. My heart goes out to this child of mine, this child who is so frugal, who watches every single penny. I want to rush up to his room and stuff $29 into his piggy bank so that he won’t feel the pain. I truly want to pay the charges for him.
But I hold back.
It can be so painful to be a responsible parent. Parenting these days in this country seems to be about helping our kids not have pain or disappointment. But that is not parenting. That is coddling.
I am a parent.
When Jon called, I told him how this works. I told him that it is important to pay all bills on time. That now he only has a credit card. But when he grows up, he will have the rent, the utility bill, the mortgage. All of those bills have to be paid on time, even if there are no steep financial penalties for not paying the bill on time.
And that is why Jon has a credit card. To learn to manage money in preparation for adulthood.
Even if it is no fun.
Justine
Fourteen Days until France
August 11, 2009
Hannah, my daughter, leaves in fourteen days to study abroad in France for a year.
Hannah will be an Ambassador with the Rotary Youth Exchange. If you want to see a world, and you are in high school or would like to do a gap year, I highly recommend this program.
Hannah is getting ready to leave. Besides all of the packing she needs to do and the PowerPoint presentation that she needs to complete, Hannah is putting her money matters in order.
Anyone with experience in managing their own money and traveling abroad knows that you MUST call your bank(s) if you plan on using your accounts in any form or fashion when you are overseas. Otherwise, if you try to use that credit card or that debit card, your bank will likely not approve your impending transaction because they will take all of the precautions they can to protect themselves and assume that your card has been stolen, because they don’t have the correct information.
So if you want to use your accounts while overseas, it is best to tell your banks that you will be overseas and that you may use your accounts.
Hannah has decided that she will open an account with a bank in France. Hannah will take euros with her in order to open the account. But as a backup, Hannah will take her debit card for her checking account here in the States, just as a precaution for emergency funds. So Hannah called her bank yesterday to advice them that she would be traveling abroad and that she wants full unfettered access to her accounts while she is abroad.
Now, you know me. I’ve got a fifteen-year-old who manages her money without much counseling from me anymore. I’ve taught her a lot and now she just needs to ask me questions from time to time.
But this time, I asked her questions. I asked her how the call went. She says it went just fine. I believe her. And if it didn’t, well, it can get fixed later, right? I’m not going anywhere and I am always willing to help kids learn about money.
Justine
