Call me stupid or something, but this credit card lesson is really happening to me few months back. Having a credit card, I was under the impression everything I can pay with it. Here’s the story.
New Credit Card and My Curiosity
Currently, I am staying in a rented apartment. Each and every day 1 of the month, I need to pay the rental fee to the owner. Everything normal, except I just got my first real credit card ever (yes, I just got it when I was 29) and out of my curiosity and thinking I might get miles, I tried to pay my rent with the credit card. Payment successful. Yay!
Oh My God!
The next 2 days after making payment, my wife checked my credit card e-statement and found a strange interest and fee being charged to me. The amount is quite big. I didn’t use the credit card to pay something else during these 2 days, so it must be the rental payment having problem. I paid $900 for the rental, and the fee charged to me was $54 and another $0.7 for the interest. I was in a shock and directly googled here and there until finally I found that making rental payment with credit card is considered as doing cash advance to the bank. Further finding, the cash advance fee is 6% of your total cash advance (6% from $900 is $54) and the interest is 26% per annum, calculated on daily basis (26% from $900, divided by 360 days is $0.7). OMG!
FYI, in developed countries like Singapore, having $10,000 in your saving account, you can only get around $0.8 a month from the interest (0.1% saving interest per annum). Now you can see how big those $54 fee and $0.7 daily interest charges compare to $0.8 per month. If I’m having $10,000 in my account, I need to accumulate the saving interest of $0.8 per month for 67.5 months to get $54.
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Having known this, I paid all of my credit card debt directly at that moment, afraid the bank will charged me another interest. Lesson learned I said to myself- in this case, the hard way. Still I tried to have positive thinking, by telling myself, lucky I paid only my $900 rental with the credit card cash advance, what if I paid something else bigger.
How to Make the Bank Cancel The Charges
The next few days after making payment to the bank, I didn’t stop finding about cash advance, I was looking a way to cancel the fee and interest being charged to me. In fact I managed to get them offset by calling the bank representative, basically told them that their bank website didn’t warn me upfront when making such payment with credit card will incur payment fee and interest. I was told to wait for few days, if granted by the bank, I should see the charges being offset. And yes it took 5 days for them to offset the fee and interest charged to me. I was then happy again 🙂
What you can do if similar things happen to you
Well you can do feel sorry about it, but what has happened, has happened. If it was not too long ago, you can try to call the bank customer service or directly come to one of their branch, explain the situation you have and tell them why you did it – in my case they didn’t have any upfront warning for such charges and their banking terms was too complicated for a normal person to understand them. Ask them, since this is your first time making such thing, whether all the charges charged to you can be reverted. All you need to do is really courage to thank them for their complicated banking terms and explain the stupidity you have made. For me, it worked well. I got my money back. Give yours a try and good luck!
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