Money Helps
A Late-Payment Penalty Gets Absurd
By Ellen McGirt

(MONEY Magazine) – Q I transferred a high-interest credit-card balance to my Sony Visa card because they offered a rate of 3.99% until the transfer balance is paid. A few months later I mailed my check as usual, but it got credited a few days late. They charged me a fee and raised my rate to 27%! Can they do that? --Terry Salata, Livonia, Mich.

ANSWER Can they ever. You ran head on--thwack!--into a wall of punitive interest-rate hikes, an increasingly common penalty levied against even good customers. One late payment can cost you thousands in interest. And it's not like you were a deadbeat: You offered proof of more than a year's worth of on-time payments before the glitch, and it was you who alerted Sony that your snail-mailed check was late being processed. Couldn't they cut a good customer a break?

Evidently not. You got no love from customer service, and supervisors claimed that they were powerless because you'd been flagged "high risk." That seemed like the end of it, but you could have tried one more move: Sidestep the call center and ring Chase headquarters (Sony's credit-card issuer, as it says on your statement). You can usually find a corporate number on a company website, but if it's not in plain sight, ask a reference librarian at your public library.

On this tack, you might not get a decision maker at first, so be persistent. Call armed with a competing company's offer, as the threat of pulling your business can help things along. Ask for the division that handles complaints; if you get the runaround, ask for the president's office. Whomever you end up with, ask for a fast resolution and threaten to take the competing offer. Follow every call with a letter, including documentation.

When we called HQ, a consumer-complaint specialist agreed that your rate hike seemed unfair given your stellar profile. Chase restored the advertised rate for your transfer balance, and you've been credited the $3,318.77 in interest you paid because of the rate spike. Would you have gotten the same response without our help? Hard to say. Far better to remember that the best offense is a good defense. Don't be late. Mail payments a week earlier, ask to have your monthly deadline changed or--quickest of all--pay online.