Don't wait to receive a late fee, pay your bill at MyGoodToGo.com, by mail, or over the phone.
Get first-time forgiveness of penalties
Customers can now call Good To Go! to request a one-time waiver of all unpaid late fees and penalties if you pay the original tolls.
Yes, you can dispute a penalty over the phone or in person as well. View our disputes page for a list of reasons to dispute your bill.
There is no maximum number of penalties or fees that can be waived for a first-time toll violator. When you have 11 or more civil penalties, your request goes through an additional approval process which can take three to four weeks. But as long as you meet the eligibility requirements, your fees and penalties will be waived.
Who is eligible for forgiveness?
First time toll violators with unpaid civil penalties and fees not associated with a prior administrative court judgment.
Who is not eligible?
- Customers who have received penalty forgiveness multiple times in the past.
- Customers who have already paid a civil penalty and did not request an administrative court dispute hearing.
- Customers whose debt is in collections.
- Customers who have declared bankruptcy.
Can I request forgiveness multiple times?
The first time you ask for forgiveness, we waive all of your unpaid penalties and fees as long as you pay the original tolls.
You can pay a civil penalty using a credit card, debit card, check or electronic check using the following options:
What happens if you ignore a civil penalty?
- Customers who had a hearing with an administrative law judge between Feb. 19 and July 20, 2015, may request the judge to refer their case back to Good To Go! for dismissal.
- Customers who had an administrative court judgment issued prior to February 19, 2015 may request the judge to reconsider possible mitigating circumstances.
- 1 example letter requesting mortgage late fees be forgiven - You looking for this?
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- 2 Student Loan Forgiveness Programs: The Complete Guide
- 3 Will A Late Credit Card Payment Hurt My Credit Score?
- 4 How to Wipe Out Credit Card Late Fees & Bank Overdrafts
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Student Loan Forgiveness Programs: The Complete Guide
Are you one of the 37 million Americans that owe a total of approximately one trillion dollars in student loans? 1 Is your debt dragging you down? Don’t know what to do with the umpteenth letter from the debt collection agency, let alone how to go about getting student loan debt forgiveness? Feel like you’re being forced to choose between buying food or repaying a small fraction of a loan you took for a college degree that you finished years ago?
Many learners that use SkilledUp to search for online courses are burdened with student loan debt. Maybe their original career dreams didn’t pan out. Maybe they feel stuck in an emotionally unfulfilling and financially unrewarding job. Whatever it was that got them to where they are today, they’re not happy with their debt situation. They want a change. To learn new skills. To start on a new occupational path. And they want to get rid of debt that’s hanging like an albatross around their necks.
That’s why we wrote this article. Because we’ve been there (many of the staff members in the SkilledUp New York office have had student loan debt at one time in our lives). So for those of you who are tired of living paycheck to paycheck, and who want to jump-start the next phase of your life, we put together this guide to student loan forgiveness.
New Student Loan Volume (Non-Consolidation). 2
Loan forgiveness is the cancellation of a loan’s remaining balance or a portion of the balance. In this article, we’ll focus mainly on the forgiveness of student loans made by the US government. We’ll also explore various programs that are essentially loan “forgiveness” programs, even though they might be referred to as loan “repayment” programs.
An American Student Assistant report, “60+ Ways To Get Rid Of Your Student Loans (Without Paying Them),” 3 highlights some important distinctions between loan forgiveness, loan discharge, and loan repayment:
The difference between loan forgiveness and discharge is the circumstances that can cancel the debt. Loan discharges usually occur if there is no way the borrower can pay a loan (e.g., a total and permanent disability or death) or if a borrower can no longer apply the education for which the loan was granted (e.g., the school the borrower was attending closed before they could finish their program).
Loan forgiveness happens when the forgiving party (e.g., the [US] government) determines that the borrower has given back to the community in a way they’ve specified, like through teaching or public service. Special repayment programs can act as a form of forgiveness as well. Federal and governments, as well as organizations, offer these programs to promote service in needed fields or high-need areas.
The type of loan you have will influence your options. The following examples illustrate the importance of knowing what type of loan you have.
If you’re a teacher with a federal loan debt, for instance, your options differ according to whether you have a Direct Loan, a Federal Family Education Loan, or a Federal Perkins Loan. 4
Example: Public Service Employee
If you work full-time in a public service job, for instance, and your loan is a Federal Perkins loan, you’re not eligible for the Public Service Loan Forgiveness (PSLF) program, 5 yet you can become eligible if you refinance (“consolidate”) your loan into a Direct Loan (those borrowed from the Department of Education). 6
Which of the following loans do you have?
A federal student loan, made through the William D. Ford Federal Direct Loan Program, for which eligible students and parents borrow directly from the Department of Education. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans are types of Direct Loans. 7 Visit the Education Department’s Student Aid website for more information on Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.
A loan made under the Federal Perkins Loan Program for students with exceptional financial need. Perkins loans are administered by the school. 8
For information about eligibility, borrowing amounts, interest rates, and more on Perkins loans, visit Federal Student Aid (the Education Department’s official website for this type of loan).
The most common federal loans students receive. Stafford loans can be either subsidized (by the government) or unsubsidized. 9 Subsidized loans get a slightly better interest rate, which the government pays until six months after graduation. The responsibility of repaying Stafford Loans falls on students, not their parents. 10
The National Student Loan Data System
Not sure what loans you have? Have you perhaps lost all of your original loan documentation? If so, logon to the National Student Loan Data System (NSLDS), the Department of Education’s federal student loan database.
The US government’s Public Service Loan Forgiveness (PSLF) Program is way out of federal student loan debt by working full-time in public service or volunteer work. Created in 2007, it encourages individuals to enter lower-paying but vital public sector jobs such as military service, law enforcement, public education, and public health professions. 11 Generally put, this program is for those who work for a 501(c)(3) nonprofit organization or who work in federal, state or local government jobs. Yet even though over 25% of the US workforce work in these kinds of jobs, too few of public service workers take advantage of these programs, according to the Consumer Financial Protection Bureau (CFPB). 12
To qualify you’ll have to make at least ten years of on-time, monthly payments on your loan. 13 Also, importantly, nobody will be eligible for this program until October 2017. 14 Therefore, if you’re planning to utilize this program, consider keeping in a safe place all documentation that proves you’re working in full-time public service job each year, such as tax forms and pay stubs. Also think about maybe asking your employer to fill out an employment certification for PSLF form: 10 page PDF that includes the form and the instructions; 4 page PDF that only has the form.
If you volunteer with AmeriCorps or Peace Corps, you might be eligible for PSLF. 15
Consider watching this Fed Loan Servicing video about PSLF.
As per StudentAid.ed.gov, an official Education Department website, there are two types of loan forgiveness programs for teachers:
- Teacher Loan Forgiveness for Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans.
- Teacher Cancellation for Federal Perkins Loans.
As the name suggest, the Income-Based Repayment (IBR) Plan is mostly about repaying your loans, rather than forgiving them. However, in a way it works like a loan forgiveness program because, if you qualify, your monthly payments will be lowered. Furthermore, if you repay under IBR and meet certain other requirements, any remaining balance will be forgiven after 25 years.
As per StudentAid.ed.gov, the following loans are eligible for IBR:
- Direct Subsidized and Unsubsidized Loans
- Direct PLUS Loans made to graduate or professional students
- Direct Consolidation Loans without underlying PLUS loans made to parents
- Subsidized and Unsubsidized Federal Stafford Loans
- FFEL PLUS Loans made to graduate or professional students
- FFEL Consolidation Loans without underlying PLUS loans made to parents
The IBR Plan is sometimes colloquially referred to as one of Barack Obama’s student loan forgiveness programs. 16
This plan is another one that might not appear to be about loan forgiveness, but in some circumstances, it is. This plan allow some graduates to pin their federal loan payments to 10% of their discretionary income. 17 Also, if you repay under Pay As You Earn and meet certain other requirements, any remaining balance will be forgiven after 20 years.
As per StudentAid.ed.gov, the following loans are eligible for Pay As You Earn:
- Direct Subsidized and Unsubsidized Loans
- Direct PLUS Loans made to graduate or professional students
- Direct Consolidation Loans without underlying PLUS loans made to parents
Many companies have programs for their employees that are essentially student loan forgiveness. However, these programs might be called other things. They might be called a student loan reimbursement program, for instance. Or a student loan repayment program. The important thing to know is that your company might not publicize the fact that they’re willing to pay off your student loans. So talk with your manager or HR representative to see if your employer has such a program.
If you’re experiencing economic hardship, illness, unemployment, or another circumstance that’s making it hard—or impossible—to repay your loan, loan forgiveness is not the only option. In this section, we list some alternatives.
Economic Hardship Deferment
If you’re experiencing extreme economic difficulties, use FinAid’s Economic Hardship Deferment Calculator to see whether you might qualify for a deferment, watch this video, then consider filling out an Economic Hardship Deferment Request form.
Forbearance is a period during which your loan payments are temporarily suspended or reduced because you are experiencing financial difficulty. During forbearance, principal payments are postponed. For both subsidized and unsubsidized federal loans, the borrower is responsible for paying the interest that accrues during the forbearance period. Your loan holder can grant forbearance in intervals of up to 12 months at a time for up to three years. These principles apply to federal student loans. Private student loan forbearance varies and is less extensive than the federal program.
You can qualify for an unemployment deferment if you can prove that you’re eligible to receive unemployment benefits or if you’ve diligently searching for full-time employment. 19
TG, a nonprofit corporation that promotes educational success, has extensive information about deferments related to rehabilitation training, temporary total disability, parental leave, military service, and more.
You’re probably familiar with Chapter 11 bankruptcy. It concerns business discharging their debts that they can’t repay to creditors. However, the parts of the US Bankruptcy Code that relate to consumers, including students with unpayable debts, are Chapter 7 and Chapter 13. If you successfully file for Chapter 7 bankruptcy, your student debt might be fully or partially discharged. If you successfully file for Chapter 13 bankruptcy, your loan repayments might be lowered.
The important thing to note about the Bankruptcy Code, however, is that student loans are exempted from forgiveness in bankruptcy. That is, unless you can prove that they provide you “undue hardship.” 20 Therefore, if you’re considering pursuing bankruptcy as a way to attain student debt forgiveness, consider hiring a bankruptcy lawyer familiar with adversary proceedings. According to a 2012 report published in the American Bankruptcy Law Journal, 21 having a lawyer increases your chances of successfully filing for bankruptcy.
According to the Education Department’s Student Aid website, 22 a court will consider the following when determining if you’re experiencing “undue hardship”:
- If you’re forced to repay the loan, will you be able to maintain a minimal standard of living?
- Will your hardship continue for a significant portion of the loan repayment period?
- Did you make good-faith efforts to repay the loan before filing bankruptcy?
Additional resources for bankruptcy related to student loans:
Most of this guide explores student loans funded or subsidized by the federal government. But what if you have a student loan from a bank, credit union, or other type of lender? If you’re hoping that a private institution will forgive your private student loan, you might be out of luck. At the time of writing this article, there are only nine US lenders that offer consolidation loans. As per FinAid’s comprehensive list, these lenders are:
When consolidating your private loans, which are sometimes also called alternative or direct-to-consumer loans, the lender might consider your application based on some of the same things that made you eligible for the loans in the first place, such as your credit history. The lender might also take into consider criteria such as loan repayment history, proof of income, and assets.
In the past, some lenders offered refinancing student loans options, yet no longer do. We contacted Citibank about their consolidation offerings. Citibank’s helpdesk sent this response: “Unfortunately, we no longer offer loan consolidations or student loan refinancing. As market conditions change, so does our ability to offer certain types of educational funding options.” 23
Most of this guide is written for borrowers. But what if you’re an employer? If you are, and you’re interested in helping your employees with loan forgiveness via PSFL, go to this MyFedLoan.org page, click on the Information For Employers tab, and read about if your organization is an eligible employer, and about hints for completing the Employment Certification Form.
Chapter 5 in Ken Clark’s The Complete Idiot’s Guide to Getting Out of Debt is titled “Denial, Acceptance, and Action.” In it is a checklist that challenges readers to see if they’re generally in denial about their debt situation. In the following section, we’ve adapted Ken Clark’s checklist so that it applies to denial about student loans. We’ve also added some of our own.
How many of the following apply to you?
- A friend or family member sent you a link to this article.
- You don’t open student loan statements immediately upon arrival.
- You can’t identify, within a few hundred dollars, your total student loan debt.
- You can’t accurately guess, within one to two months, when your student loan should be paid off.
- You’ve made late payments in the same month that you’ve spent money frivolously on clothes, entertainment, and restaurants.
- You’re mad at the late fees your lender charges you.
- You’ve applied for credit cards to pay off your student loan, and you’re afraid to share this with your friends and family.
- You believe that many, small purchase won’t make it more difficult to repay your student loan.
- You’re reluctant to logon to the National Student Loan Data System (NSLDS) or your lender’s website because you don’t want to know how much you owe.
If several of the above items apply to you, you’re probably in debt denial. And if you’re pretending that there isn’t a problem—stop it. Unaddressed problems don’t disappear. With more time, they fester. So stop ignoring late payment fees and do something proactive.
You can consolidate your federal student loans for free via the Department of Education’s direct consolidation program at StudentLoans.gov. For instance, if you have both a Perkins loan and a Stafford loan, you can merge them into one.
Consolidating loans is important for some borrowers because some loans don’t qualify for PSLF. Yet you can consolidate your ineligible loans into a Direct Consolidation Loan, thus making your new loan eligible for PSLF. To learn more about this, read about consolidating loans on the Education Department’s Student Aid website. Also, consider taking the FedLoan Servicing’s Consolidation Quiz or using their Consolidation Estimator.
If you’re pondering consolidating your loans, note that parent and student loans can’t be consolidated into one loan. Also, beware of companies offering to consolidate your student loans for a fee. If they want to charge a processing fee, administrative fee, or consolidation fee, they are trying to scam you. 24 It is free to consolidate federal loans, so avoid paying a company do this for you.
Loan Forgiveness Resources for Specific Professions
All loan forgiveness programs are not created equal. Here are a few resources that cater to specific occupations.
AmeriCorps Volunteer Resources
Attorney and Lawyer Resources
- General information about loan repayment assistance programs (LRAP), provided by the American Bar Association (ABA).
- In this ABA guide, search for “forgiveness.”
- ABA list of states that offer LRAPs.
- The John R. Justice Student Loan Repayment Program provides loan repayment assistance for state and federal public defenders and state prosecutors who agree to remain employed as public defenders and prosecutors for at least three years.
Automotive Aftermarket Industry Workers Resources
Childcare Provider Resources
Health Workers Resources
- Research scientists and doctoral level social workers: US National Institutes of Health Loan Repayment Program (NIH LRP).
- Directory of loan repayment and forgiveness programs for medical and health students, Association of American Medical Colleges (AAMC).
- Nurse Corps Loan Repayment Program, US Department of Health and Human Services.
- Video for medical students about the PSLF program, made by the Association of American Medical Colleges (AAMC).
- The US Army has several programs, including the Active Duty Health Professions Loan Repayment Program and the Healthcare Professionals Loan Repayment Program for reservists.
- The US Health Resources and Services Administration’s Faculty Loan Repayment Program (FLRP).
Peace Corps Volunteer Resources
- Pages on the Peace Corp website about student loans and loan deferment: general information, instructions, and FAQs.
US Military Resources
Even though one of Alexander Pope’s most famous lines of poetry is, “To err is human, to forgive is divine,” forgiveness isn’t technically one of the seven heavenly virtues. 25 Yet no-one would dispute that forgiveness is a positive force in the world. And most of us could use a little more of it—especially regarding our finances. We hope that this guide has helped your journey on the road to being debt-free.
(In a sense, this is the end of this article. Yet a “Complete Guide” wouldn’t be complete without an appendix or two. In the next sections, we compiled a list of the most important terms that relate to student loan forgiveness programs, and a list of state-based loan forgiveness programs.)
Appendix: Terms You Need To Know About Student Loan Forgiveness Programs
Combining one or more loans into a single new loan. 26
Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you haven’t made a payment in more than 270 days. 27
A temporary suspension of a borrower’s loan payment. There are many different types of deferments. During deferment of subsidized loans, principal payments are postponed and interest doesn’t accrue. During deferment of unsubsidized loans, principal payments are postponed but interest continues to accrue. 28
You become delinquent on a loan if you don’t make a payment when due. 8
The release of a borrower from the obligation to repay his or her loan. 29
The cancellation of all or some of your federal student loan balance. If your loan is forgiven, you’re no longer responsible for repaying that portion of the loan. 30
Your loan servicer is the company that sends you your bill each month. Servicers are private companies that collect payments on a loan, respond to customer service inquiries, and perform other administrative tasks associated with maintaining a loan. Loan servicers also disburse loans/funds, monitor loans while the borrowers are in school, process deferments and forbearances, respond to borrower inquiries, maintain loan records, and ensure that the loans are administered in compliance with federal regulations and other legal requirements. 31
Loans the government pays the interest on during in-school, grace, and approved deferment periods. Perkins loans are subsidized, and Stafford loans can be subsidized. 9
A non need-based loan (such as unsubsidized Stafford, Parent PLUS, or Student PLUS Loans) on which the borrower is responsible for paying the interest that accrues from the date of disbursement until the loan is paid in full. 32
Daniel A. Austin and Susan E. Hauser, Graduating with Debt: Student Loans Under the Bankruptcy Code (2013). American Bankruptcy Institute, 2013; Northeastern University School of Law Research Paper No. 164-2013. ssrn.com/abstract=2351586; archive.
In this book, Austin and Hauser write: “Some 37 million Americans owe a total of approximately $1 trillion dollars in student loans. Some will eventually pay their loans, others will obtain full or partial loan forgiveness and many will default or die before completing payments.” Source: www.northeastern.edu/law/news/announcements/2013/austin-graduating-with-debt.html; archive.[↩]
Excerpt: “Not all federal student loans have the same forgiveness, cancellation, or discharge options. Discharge provisions differ depending on whether you have a Direct Loan, a FFEL Program loan, or a Federal Perkins Loan.”[↩]
Public Service Loan Forgiveness, Federal Student Aid; archive. Excerpt: “What loans are eligible for forgiveness? Only loans you received under the William D. Ford Federal Direct Loan Program are eligible for PSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan Program, or any other student loan program are not eligible for PSLF.”[↩]
(B) Public Service and Student Debt: Analysis of Existing Benefits and Options for Public Service Organizations (PDF); archive. Excerpt from page 6: “Type of loan. Only federal Direct Loans—that is, those originated by the Department of Education – qualify for forgiveness under the [PSLF] program. However, a borrower with other federal student loans can become eligible for the benefit by taking additional action. For example, federally guaranteed student loans originated under Federal Family Educational Loan (FFEL) and the Perkins Loan programs are not eligible for loan forgiveness. Borrowers with these loans must refinance (“consolidate”) these federal loans into a new Direct Loan to qualify.”[↩]
The Complete Idiot’s Guide to Getting Out of Debt, by Ken Clark, chapter 15, “Student Loan Strategies.”[↩]
Excerpt: “According to a report released today, the CFPB estimates that more than 25 percent of the U.S. labor force is in public service.”
Excerpt: “More than 33 million workers qualify to have their student loans forgiven because they work in schools, hospitals or city halls, but too few take advantage of the options because the programs are overly complicated and often confusing, the government’s consumer advocate [Consumer Financial Protection Bureau] said Wednesday.”[↩]
Excerpt: “What should I do after I become eligible for PSLF?
After you make your 120th qualifying payment, you will need to submit the PSLF application to receive loan forgiveness. The application is under development and will be available prior to the date when the first borrowers will be eligible for PSLF Program forgiveness, in October 2017.”[↩]
Deferments, Student Loan Borrowers Assistance (SLBA); archive.[↩]
(A) studentaid.ed.gov/repay-loans/forgiveness-cancellation#discharge-in Excerpt: “If you file Chapter 7 or Chapter 13 bankruptcy, you may have your loan discharged in bankruptcy only if the bankruptcy court finds that repayment would impose undue hardship on you and your dependents. This must be decided in an adversary proceeding in bankruptcy court.”
“An Empirical Assessment Of Student Loan Discharges And The Undue Hardship Standard,” by Jason Iuliano, July 24, 2011, American Bankruptcy Law Journal. Abstract: ssrn.com/abstract=18&4445; archive. Full report: getoutofdebt.org/wp-content/uploads/2013/01/SSRN-id18&4445.pdf[↩]
Email from [email protected] to the author, June 19, 2014.[↩]
Excerpt: “The student loan consolidation scam typically involves a company offering to consolidate your student loans for a fee (a processing fee, administrative fee, or consolidation fee). In exchange for paying the fee, the company will consolidate your loans.”
(B) The Complete Idiot’s Guide to Getting Out of Debt, by Ken Clark, chapter 15, “Student Loan Strategies.”[↩]
The seven virtues, according to James Stalker’s book, The Seven Cardinal Virtues (1902), are wisdom, courage, temperance, justice, faith, hope, and love.[↩]
Will A Late Credit Card Payment Hurt My Credit Score?
There’s Always An Excuse For Being Late!
I was so rushed to pack for Europe that I forgot to schedule my normal credit card payment for the first of the month! As a result, I missed my $535 credit card bill completely and didn’t realize it until three days after due date!
The first thing to realize is it’s not the end of the world if you accidentally miss a credit card payment. Things like this happen all the time, and the hammer does not fall on your credit score so quickly.
The second thing is there’s a grace period to how late you can be before getting hurt. Being three days late is much different from being 30 days late. But being 90+ days late is a disaster!
The final thing is credit card companies want to make money off you. Paying late or not in full every month makes them an estimated $60 billion+ a year! If credit card companies knew you would never default, they’d happily let you pay late all the time!
TWO STRATEGIES FOR HELPING WAIVE LATE PAYMENT FEES
1) Ask for forgiveness. Your first option should be to call your credit card company and ask for forgiveness. I have been late on my credit card payment four times in 180+ months of payment always because I forgot. Each time I was late, I called the credit card company within seven days to explain myself and ask whether they would wave the $25 missed payment fee and accept payment in arrears. Each time they said yes, partly because I have demonstrated years of regular payments, and partly because I always called shortly after realizing I was late. As a result, my credit score was not hurt, and if it was hurt, it still stayed above 780 so who cares. Just make sure to ask whether they’ve reported you to the credit bureaus.
2) Threaten to leave. If forgiveness doesn’t work, your second option is to threaten to cancel your account after payment. Given there are an endless amount of credit cards available to choose from, your credit card company doesn’t want to lose you as a customer. The only problem with changing credit cards is that it’s a pain to update credit card info with existing accounts that have your information e.g. Amazon, cable company, insurance, etc. Given your boldness usually works to get your fee waved, your credit score should also not get negatively impacted if you are talking to them within a week. I had one case that succeeded, and my credit score remained the same. I had one case where the rep just wished me good luck, and my credit score was not negatively impacted from what I could tell.
But what if your threat doesn’t work and you really love your existing credit card? No shame in going back and asking for forgiveness again! After all, you were the one at fault, not them. As one reader mentions below, she called back several times to ask for forgiveness and finally found one representative who waived her fees while all others would not!
The big problem occurs when you are more than 30 days late with your credit card payment. More than 30 days means that you are entering your second billing cycle and your account is now elevated to warning status. 60 days late is the next warning level until you are considered delinquent at 90 days. At this point, no amount of begging or threatening will be able to wave your late fees and save your credit score.
It is estimated by FICO that……..
If your credit score is 680
- Your score will drop 60 to 80 points to 600-620 on average and as low as 530.
- Your score will drop 80 to 110 points to 650-610 and as low as 525.
If your credit score is 780
- Your score will drop 90 to 110 points to 670-690 on average, and as low as 620.
As you can see, being late on your credit card payment can severely damage your credit score. Going from a 720 to 600 means car loans will likely be 2-3% higher than optimal. Your mortgage rate will also be at least 1.5% higher than the best rate which adds up to huge increased payments over the long run!
HOW LONG IT TAKES TO IMPROVE YOUR CREDIT SCORE ONCE DINGED
* 680 credit scores can take up to 9 months to recover.
* 720 credit scores can take up to 2.5 years to recover.
* 780 credit scores can take 3 whole years to fully recover!
The good news is that credit scores can recover after a 30 day+ late payment if you pay consistently again over time. The bad news is how long it takes for really good credit scores to recover if you are in delinquent status. Three years to get back to a 780 from a 600-level score is an eternity for some people.
For those who have busy lives or who are always traveling, consider employing an autopay on your credit card account. Calculate the average amount of money you spent on your credit card for the past 12 months, divide by 11 to give you a buffer and put that amount on auto pay. This way, you’ll never miss a payment. It’s not a big deal if you pay more than you owe either since the payment just acts as credit for the next month’s cycle. Having autopay on your mortgage is a given.
* Check Your Experian Credit Score Today: Check your latest Experian credit score straight from their website. Experian is the most commonly sourced of the big three. It’s a good idea to see what your credit score is before applying for a loan. If it’s below 720, you won’t get the best rate, but at least you can spend time to improve your score. Furthermore, 1 out of 4 credit reports have errors, negatively affecting one’s credit score. I had a $8 late electric bill that crushed my credit score by 100 points and almost derailed my mortgage refinance. The scary thing is, I had no idea! A FTC study reported that roughly 25% of credit reports have inaccuracies.
* Looking for an awesome travel rewards credit card? Check out the Chase Sapphire Preferred® Card and others. I use my Chase credit card for all my business and travel spending to get points for more free travel, insurance in case my bags are lost or my flight is stuck, and more insurance for defective products I buy and want to return. Everybody should have a credit card for the free 30 day credit. Just make sure to pay off your credit card every month in full! Check out some of the benefits:
- Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That’s a
$650 value right there.
How to Wipe Out Credit Card Late Fees & Bank Overdrafts
Credit card late fees and bank overdrafts suck. I have 4 checking accounts and three credit cards. Before I get ripped for admitting that as the author of a personal finance site, let me quickly explain. I have two checking accounts at two different banks, two for personal use and two that I share with my wife. Why two banks? I fully expect one of the banks to go public someday, and I want to have holdings there in the event that they do (you can actually buy discounted shares when this happens).
The three credit cards can be boiled down to one for myself, one I share with my wife, and a third because it basically offered me a free flight and has no annual fee. I don’t carry a month-to-month balance on any of the cards, and only use credit cards in a way to better my financial situation.
The one problem with carrying this many financial accounts is that from time-to-time it is quite possible that you neglect to re-balance your account. Perhaps a payment reminder ends up in your spam filter or your payment doesn’t process on time. The result is a bank overdraft or a credit card late fee. This has happened to me four times, at a $25 fee per occurrence. However, I ended up not paying a dime for my mistakes and you shouldn’t either.
Why Banks and Credit Card Companies Should Waive your Late Fees
First, let’s be clear. This strategy may not work for everyone. If you have a history of over-drafting or missing your credit card payments and don’t have strong credit, you’re probably not going to be able to talk the customer service rep into waiving your late fees.
Second, if you owe a lot of money on your card, you’re probably not going to get a break.
Third, if you try to take advantage of a financial institution’s forgiveness and become a common repeat offender, they are much less likely to be accommodating.
On the other hand, if you have a history of good credit and on-time payments, you should be able to get away with these annoying fees. Here’s why: these financial institutions have no leverage to keep you around if you’re not happy with their service, and the advertising fees they pay to acquire a new customer are much higher than the $25 fee they’re getting from you. If they don’t bend over backwards to keep you happy, there’s hundreds, if not thousands of other institutions for you to take your business to.
- Rep: Thank you for calling Your Local Bank, my name is Friendly, how may I help you?
- You: Hi Friendly. I just noticed that I over-drafted on my bank account. I feel horrible and would like to resolve this immediately. May I send in a check or cash to get this taken care of?
- Rep: Absolutely. Here’s our address.
- You: Thanks, Friendly. This never happens to me, I noticed that there’s a fee on my account for this, is that correct?
- Rep: Yes it is. Let me look at something real quick. OK, we can waive this fee for you because you don’t have a history of overdrafts.
- You: Gee, thanks Friendly. You’re the best. You have a wonderful day.
If you have to directly ask for them to take off the fee, don’t feel ashamed in it. Others do it all the time. They’ll most likely give it to you. If they don’t, maybe it is time to find another bank, or at least have a talk with their manager first.
Update: There have been new bank overdraft protection rules put in place by Congress that should help you limit your overdraft fees. Banks will now ask you if you’d like to have the service of not running out of funds when you overdraw. If you decline the “service”, your charge simply won’t go through and you won’t have to pay an overdraft fee.
- Rep: Thank you for calling Your Credit Card Company, my name is Slightly Less Friendly, how may I help you?
- You: High Slightly Less Friendly. My credit card stopped working, so I went online to check my balance and noticed that I missed my payment. I’m really embarrassed about this and would like to take care of it immediately. In fact, I just submitted my payment online before I called you. Should my card start working now?
- Rep: Let me check. It looks like your transaction has processed. It usually takes 2-3 business days to reflect in your account and your card will be active at that time.
- You: Thank you. I don’t know how I missed this, I always pay on time. Could you find it in your heart to waive the late fee for me?
- Rep: Let me look. I do see that you have a history of paying on time, so I am able to waive the fee for you this time.
- You: Gee thanks. You have a great day.
The credit card company is usually slightly less accommodating than the bank when it comes to waiving these kinds of fees, but they shouldn’t give you too hard of a time. If they do, it may be time to find a new credit card company. Threaten to leave, and you’ll usually get results. It costs credit card companies over $100 to acquire a new customer.
If you have a good financial history, own up to your mistake, and use kindness versus intimidation, there should be no reason why you have to pay these annoying late fees. Don’t be afraid to ask, you’ll usually get what you want. If not, look for a customer friendly institution to move your business to.
- Have you found any clever ways to avoid common annoying late fees from your bank for credit card company?
- How much does your credit card company charge for a late fee?
- How much does your bank charge for an overdraft?
Hard Credit Inquiry Vs. a Soft Credit Inquiry & their Impact on your Credit Score
Ally Bank Raise Your Rate CD: Insurance Against Rising Interest Rates
Thanks for the tips. I recently found a $25 fee on my account and I have no idea why cause I always pay on time. I’m going to call up and after finding out what it’s for use your tips to get it waived.
One way to avoid charges like this is to pay the bill WHEN IT ARRIVES; don’t play games with due dates – you will inevitably lose.
Another good practice is to pay online at the Payee’s site if they allow it. This means that you have that they are aware that you initiated a payment.
I tend to stay away from Bill Pay – the way that most Banks seem to do this is that they send the payment onwards in the form of a check, which is inefficient and time-consuming.
Probably it is helpful to mention your savings account etc. balance with the
bank as you can not only take your card business elsewhere you can also move your account. Only if you need the big guns!!
I also have several bank accounts and several credit cards for similar reasons. I do not carry balances on my credit cards and use them for convenience and cash-rewards rebates. In my entire life I have made, perhaps, 3-4 late payments and, in the past, have had good results with methods such as given above.
Unfortunately, the most recent incident, was less than satisfying…I usually pay my bills the first weekend of the month – this month I was distracted by election hoop-la and so sat down to do it this morning and found that one of my credit cards was due yesterday. I paid the balance in full online – called to report the payment and spoke with a customer service rep – going through the spiel I got nowhere! I was told “We don’t have the option to waive late fees.” What?! This was with Chase so I then threatened to take my business back to Citibank – no go.
$39 is awfully steep for a less than 24-hours late payment on a card with an otherwise 100% clear payment history – now the question is – Do I make good on my threat to change companies? Or just write an angry letter to blow off my ire?
@ Doc – the choice is yours, but here’s how I would tackle it in 3 steps:
1. Get another customer service rep on the phone and try again. If your first try was with ‘ire’, then try a warm, friendly approach.
2. If you get nowhere there, ask for their manager.
3. If you get nowhere with the manager, write a letter.
4. If you still get nowhere, make good on your threat.
Best of luck to you!
I’m sorry this happened to you, though I am sure that the CC company isn’t.
Give them a call. Use the iron-fist-in-a-velvet-glove approach. Ask nicely, be polite (remember you’re talking to a low-paid cube-dweller), and if they refuse, ask to speak to a supervisor (aka the low-paid next-door-cube-dweller). If they flatly refuse, pay off the balance, then call to close the account UNLESS they refund that charge – and take your business elsewhere.
This is the reason that I have given up on Credit Cards. Yes, I have two, but I have used each exactly once this year, and paid them off when the bill arrived.
I had the same issue with a Chase Visa charged $500-$600 a month
and pay every month. Got $39 late fee, Chase would not waive so
I closed the account on the spot (25k limit).
Last year I had an incident with Citi which was similar – a crazy loss of cohesiveness led to me not to paying my bill on time, despite the fact that I normally pay off my card completely each month. I sent them a message of apology through the online messaging center, and not only did they waive the late fee, but they waived the finance fee that would have been on the next bill for passing the grace period, and I later confirmed that they did not report it as a late payment to the credit bureaus, so my credit is still clean.
Citi may be big and potentially evil, but they definitely treated me well for that incident.
i had excellent credit. I moved and told the po but did not tell citi because I hardly use their credit card. they don’t seem like they want to remove the negative report although they did drop the late fees.
NO. Citi is a bunch of JACk ASS Incompetents that don’t know where the hole is on the front end or the back end of a donkey when trying to work with them in disputing a credit card finance & late charge. The reason I can say this is that I work in corporate america & I see how they hire their customer support in the phillipines who understand the simple basic customer support iisues. However, when you have a more complicate issues that require some hard work that shitty CITI Custer service rep need to do to resolve the issues, it looks like it is left up to you to figure it out when you already know for a fact that you had pay on time, but because of some BS issue I.e. due date was on a Sunday, they cash your check a day late, they expect you to pay for their mistake? This is why CITi is shitty. In my highly professional opinion, I would highly recommend all CITI credit card holders to close out their Citi credit card & get a new one don’t do capital one either. The reason why I don’t recommend both these credit card companies is because they advertise so heavily on commercial TV to get new customers to replace professional business customers like me who is not going to put up with their shitty services'(trust me, the rewards are not worth it to do business with them). Other smart professional business people don’t have time to waste especially when dealing with incompetent credit card companies. For a busy business professional TiMe is Money! But the IDIOTS at CITI don’t see it that way….Oh well:)
How about this. Avoid late-fees, forgetting automatic checking withdrawal payments, on-line payments etc.. Basically anything you don’t want to forget and it’s free! “www.billjolt.com”
chase must be losing a lot of business…I’ve called twice, emailed once and still no waiver of $39 late fee. I just get the standard reply, we can’t do anything. I paid one day late. Ridiculus way to run a business and lose customers!
I spoke with 6 people for nearly an hour from both Wamu master card representatives to Wamu bank.
They gave me a really hard time, and made me so frustrated now…
They insisted that the late fee was my mistake, and they would not waive it for me.
I wonder why there’s a policy to allow user to waive one purchase payment each year, but not the late fee. That is really unfair.
ALSO, those representatives i spoke with, were really unfriendly! I felt like crying when I spoke with the 6th person…
Who can help me to deal with it?
Thank you so much,
One thing you have to remember is that the Credit-Card folks are _praying_ that your payment arrives late. If there was a way for them to legally delay all payments until after the due date, then sock you for late fees, you can be sure that they would. That is how they make their money – and in these “lean times” they are going to hang on to every dollar that they can squeeze out of you.
The only thing that works with these bozos if the threat to take your business elsewhere, and that threat only works if you can afford to pay off the balance in full… and _that_ only works if your Credit-Card is not your “Emergency Fund”.
I have two cards – a Discover card and a Mastercard. Between them, they have been used three times in the past year.
(finishing the thought) … I pay the bill in full when the statement _arrives_ and never carry a balance.
I am actually on the verge of canceling the Discover, as I am annoyed with them – they keep sending me “convenience checks” (which I don’t want and never use) even after I have told them not to do so. I suspect that they enclose these so that you are not so inclined to throw their junk mail away without opening and inspecting it.
It is so frustrating trying to get anything done with the banks. If you close your account it shows on your credit as closed by consumer – I am told that can be reflected negatively on your credit, reflected in your FICO score.
You are right. Sort of.
The FICO score is calculated as follows:
35% Debt History
15% Length of Debt History
10% Type of Debt
Canceling a long-standing CC account can therefore cause a drop in your credit rating. Buy my understanding is that the impact will be minimal.
A FICO score is only important if you are planning on borrowing money. If you have a mortgage and savings, it is not that important. The problem is that most of the banks have turned into “FICO monkeys”, making decisions based solely on FICO scores without any due diligence. Taken to an extreme, this means that if you have a million in the bank and haven’t borrowed money for 7+ years, you have no FICO score and are therefore… a deadbeat.
To quote Timon the Meerkat: “DID I MISS SOMETHING. ”
Hey, nice tips. Perhaps I’ll buy a glass of beer to the person from that forum who told me to visit your site
The late fees are complete ripoffs, especially from the credit card companies.
With the exception of a couple times in my entire life, I am never late on paying anything.
The recent $29 late fee only served to tick me off. So since they want to keep me as a customer, and want to keep earning money on me, I told them to cancel my card if they cannot take the late fee off. They did. The only other time the credit card company refused to budge. So I told the rep to cancel my card right then and there. The rep then asked what they could do to retain my business. I said, “are you kidding me? you rip me off and want me to continue with you?” They said they would credit my account, but at that time I told them don’t bother, damage was done and I no longer wan to do business with them. She went round and round on how to keep me as a customer. I wasn’t interested, but it was fun to hear THEM grovel.
Iron Door, no, closing your account doesn’t reflect negatively. In fact, it works the other way around. As long as your history is good on payments and nothing is ever in default, the less accounts you have open, the better your score. I’ve done this many times, my score is close to 900.
In my experience that’s not quite true.
I recently canceled a year-old Discover Card and my credit score dropped by a statistically-insignificant 16 points. That was the only recent change – I now have only one card (zero balance) and no debt besides 60% of the value of my house.
FWIW, A family member who makes less than half of what I do has a higher Credit score than I do! How does _that_ work?!
Closing a CC account _can_ affect your credit score (though it really shouldn’t!), though the effect is not large and it is proportional to the time you have had the card.
Thank for such a nice tips. Let see how much I can reduce from great advise.
I incurred a $39 late fee (with subsequent $5.90 finance fee) on a Chase CC.
The bill was due on a Sunday and my payment reached them the following day: Monday.
I may or may not cancel this card but I will not be using it anymore…Its already cut up.
OH…and all those advertised offers I get with my bill every month…they’ll be getting the sanitized versions of those mailed back in the payment envelope…and any postpaid Chase CC applications I see in banks or store or campus locations…Yep, their gettin’ ALL those back too…year after year after year…
I’m a petty kinda guy.
I once only paid the penalty on map. I consider everyone should supervise the grace period end
Waiving off is a good practice for those companies who have strong clientele who pay them in time. Such companies can easily waive off to retain their customers.
Nice tips and very informative indeed!!
i just paid my chase cc bill one day late for the first time, and they won’t take off the $39 late fee. I have been late with other cards and they gladly took off the fee. i think it’s time to change banks. this is just stupid on their part and no way to treat a good customer!
Chase Visa. BAD NEWS. I always pay in full and on time. Had one payment miss the due date in October by a couple of days. I called to request they waive the $39 late fee in light of my excellent record and our long term relationship. (And I was very friendly with them.) No way in the world would they waive that fee. Sheer stupidity to lose a customer like me over this. Not only does it cost much more to acquire a new customer, but the bad p.r. they will incur will encourage many others to avoid them.
I use my Chase Amazon card only for the holidays, paid the November due amount on 11/5 and the December on 11/25. I actually paid $100, well over the minimum due, but received a $39 late fee on my next statement. In retrospect, I think it’s because the $100 was received 3 days before the statement period 11/28-12/21. But clearly it was intended, and sufficient, to make the December payment.
i finally got chase chase to take off the fee after first trying to call with no luck. then i emailed them through their message center under ‘late fee reversal’ and wrote them a letter why they should take it off since i was such a good customer. surprisingly, they took it off! i guess you have to try everything before they give in.
I will never do business with Lord and Taylor ever again… I can’t believe that they will charge 29.99 for a late fee when it was only late a matter of hours. It was an oversight on my part, however, the supervisor refused to waive the fee. I will now pay off the remaining balance and cancel their card. They will never get my business ever again, and will let everyone know that this is not a consumer friendly company. It is highway robbery to charge 29.99 when your balance is $110. They entice you to use their card then when you use it, they charge mobster fees because you are late a couple of hours.
It’s a shame you paid it because legally speaking if you went to a court of law and disputed the charge you wouldn’t have to pay it. It’s unreasonable to charge 25 dollars because you were late by a few hours one time.
I just need this article on How to Wipe Out Credit Card Late Fees & Bank Overdrafts. For the life of me I can’t get it to download.
I greatly appreciate it if you could send me any information on late fees and overdraft fee on banking accounts. My husband went over the top spending wise since he deployed to Afghanistan.
I thank you for your time, and really do wish you could provide mw with all services dedicated to this problem of overdrawn – by quite a bit- and How I can send a letter explaining why this happened to me. I am a loyal customer. Just financial problems since he got back for his r&r.
Sincerely Catherine McDonald
What a lot of you have to understand is that frequently, you think you’re The Greatest Customer Ever, but really, REALLY … you just aren’t. Let me try to explain.
As the handle I used suggests, I work for a credit card company. I get to listen — all day, every day — to people going on and on about how they weren’t REALLY late, even though they clearly were, who are “good customers” and we should totally waive their fees, and oh boy … if you get one who’s TOO nice at the beginning, watch out. You just know it’s because they want something.
It’s frustrating because many times, before the customer even asks, I already know I’m going to have to say “no,” and I know the question is coming, and I know what’s going to come after I give the bad news. Try to imagine what it’s like dealing with a child: you say “no,” and the child keeps asking again and again, and no matter how much you say “no,” it just doesn’t take. “PLEEEEEASE!” “Why not??” Now imagine you have to treat that child like an adult and even be extremely polite besides. Oh, and you can’t end the conversation. You have to remain patient and calm while being berated endlessly about something you can’t change that was caused by the irresponsibility of the person berating you. And this will happen dozens of times per day, every day.
Here’s the thing: before you ever pick up that phone to call, the decision has usually basically already been made. Believe me, the bank KNOWS how good of a customer you REALLY are, and I don’t just mean how frequently you’re late; more significantly, it’s about how profitable your business is to the bank. In your mind, you may think you’re just the greatest thing since sliced bread, but in reality, the bank may actually be LOSING money on you.
If you want to ask for fee waivers, fine. Ask. I personally won’t do it, because I believe in personal responsibility. That’s just me.
But understand that if you ask and get a “no,” it’s probably NOT because the long-suffering person on the other line is a big meanie who’s out to get you. It’s probably because he/she is looking at a screen that flatly says you aren’t entitled to a fee waiver, and that’s that. Why? Because you’re not making the bank enough money to be worth it.
There a whole other reason why credit card companies will waive the late fee. And that is because it can be considered an unjust charge depending how much you owe. If you’re late one time by a couple days legally speaking they can’t charge you 35 dollars for this. It’s an unreasonable charge. So if someone calls the credit card company about the fee they will waive it. They don’t want to find themselves in a legal battle they will lose. The only reason they get away with it is because most people don’t know better and will just automatically pay the fee.
That’s not true. It’s in the cardmember’s agreement that you agreed by obtaining and using your credit card. The agreements state that if your payment is made after the due date, then it is considered late; and the account will be subjected to a late fee, and applicable finance charges for the unpaid balances. The late fees are clearly described, as well as how to avoid it.. Such as paying online, by phone, by mail/check, sometimes by paying at a branch (like for Chase, Citi).
I paid my Chase visa online on 8th and was charged $15 -total due on my visa was $51 -they confirmed I have always except once paid my visa bill on time. Sometimes computer system is so slow I cant pay online.
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