What is the "payment due date"?

[nestork]

Abez znow!

Which, in Ukrainian means "So that you know" but really means "So that later on you have no recourse in claiming you didn't know."

I just got my April VISA bill in the mail today. They included $3.54 in interest charges because they said I didn't pay my March VISA bill on time. The "payment due date" on that March VISA bill was April 7th, and I paid that bill at my local financial institution on April 3rd.

It turns out that the Royal Bank considers the phrase "payment due date" to mean the date they have to recieve your payment by, not the date you have to pay by. In my case, I paid on April 3 but the Royal Bank didn't receive the money until April 9th, which was 2 days "late" by their definition of "payment due date".

Needless to say, nowhere on my VISA bill do they clarify what is meant by "payment due date", and so I presumed it meant the day I had to pay by.

But, the kicker is that if you pay two days late, you don't get charged interest on the outstanding balance for two days, you get charged interest at 19.99% for 23 days. That's because the Royal Bank allows a

3 week grace period after they send out the bills for you to pay by. The "payment due date" is the day after the end of that 3 week grace period. If you don't pay by the payment due date, they charge interest at 19.99% for the 3 week grace period as well. So, if you pay the day after the payment due date, you're paying 22 days worth of interest, not one day, or 22/365 times 19.99/100 times your outstanding balance.

I complained about this to someone at the Royal Bank today. I told them that if they don't clarify what they mean by "payment due date", people will presume it means they have to pay the bill by, not the date the Royal Bank has to recieve the payment by, and that's misleading and undoubtedly results in lots and lots and lots of interest charges, which if people are carrying a balance on their credit cards anyway, would probably go unnoticed.

It's only $3.54, but it's the principle here. If you say "payment due date", that normally means the date a person has to pay their bill by. If it takes additional time for the payment to make it's way to it's destination, that's something the recipient should take into account when setting their payment due date.

[PV]

In my experience in business and in banking that payment due date is the day your payment is received by the lender. Not when you paid through some other institution but when the actual lender receives the cash.

I always factor in lag time from on-line bank payments, I don't understand why a credit charge goes through the day you make it but a payment can take days.

[Home Guy]

So I shouldn't call you a durock? :)

I have an RBC Visa Avion Infinite card, and I usually pay it by bringing the card to a TD bank and have the teller pay the card balance from my TD account.

Many times I have done this ON THE DAY of the payment due date.

I've never been charged interest - the payment always seems to make it to RBC on that day.

[Pico Rico]

Everybody already knows that. You're kidding, right?

[Tony Hwang]

[Tony Hwang]

Hi, Why not use on-line banking? x-action is almost instant. I had to pay tax I owe on this year's tax return. I made the payment last night on-line, the payment went thru already when I checked at lunch time today.

[Tony Hwang]

Hi, That is moot point. If you don't give enough lead time making the payment, no matter how they set the due date, your payment will be late most likely.

[PV]

I do all my bankng online but there are still occurrences where payment to another institution has taken a day or more to be processed. I leave leeway just in case of thse instances

[micky]

They already know this, and that's the big reason they don't clarify it. They want you to pay late and incur a charge. At least that was true in the US a few years ago. In the US, especially when self-addressed envelopes were included with the bill, after you had paid for months or years at an office in your own state or the next one over, they would switch your billing address to a place on the other side of the country, so it would take 2 or 3 days longer for your mail to get there, and you and loads of others would be late, and would incur the extra charge.

I think enough people found out about this and they made it illegal.

Something banks would do is, when your balance was low enough that you would bounce a check that day, instead of paying the checks in the order they came in, they would pay the biggest check or checks first, to make sure you were overdrawn immediately or as soon as possible. Then they could bounce that check and every check that followed, collecting fees every time. If they had paid the little checks first, they might have all cleared and only the last check been an overdraft. They did this on purpose and must have programmed their computer to do it. And it was the leading, biggest banks in the country that did this. The days of respecting your banker are gone. When I told one of them I would never trust his bank again, he tried to tell me why the practice was all right.

When enough people found out about this, I think because of Elizabeth Warren, that was made illegal too.

But in both cases the credit card companies and banks said, Without this revenue, we'll have to increase other fees, and they did. .

It may be misleading, but it probably isn't in the list of misleading things which are crimes, or they probably wouldn't do it. I just about guarantee there will be no criminal prosecution of anyone who works for the credit card company, or even of the corporation.

Also, why does mail get there in a day or two, but takes weeks or months to come back if it's misaddressed. And if one writes abroad, it might take a week to get there, but if it is misadressed, it can take 6 months to come back.

[Home Guy]

I have an RBC visa credit card (just like nestork) and I frequently pay it off on the day that it's due from an account at another bank (TD) - and the payment always gets there in time. No interest charge.

[mike]

There's only one payee that I know of that does not mean "received by this date." That's the USA Internal Revenue Service. They use the term, "Postmarked By."

[CRNG]

On Sat, 26 Apr 2014 03:09:36 +0200, nestork wrote in

You can see why they like it to be confusing.

[Julie Bove]

It's not instant with my bank! I have had to call them twice now because it didn't show my payment. Sometimes it can take up to 6 days. Odd because my Visa is at the same bank as my checking and savings.

[philoÂÂ]

Well I certainly never knew that.

As to the credit card bill. I too would have assumed that "due by" date would have been acceptable, but the term is somewhat ambiguous and obviously the credit card company wants to do everything possible to collect interest.

I usually pay my credit card bill within a few days of getting it to avoid such things. I am earning 0.01% interest on the money I have in my savings account so I might as well just pay all my bills before they are due.

[dadiOH]

Maybe in your world, not in mine. If someone informs me of a "payment due date" that doesn't mean "date of mailing a check" to me, it means the date the recipient expects to have cash in hand.

Brief story: when I lived in Mexico I used to pay my telephone bill via credit card at Banco Nacional. (Most people went to the TelCo to pay, standing in a line that was literally more than a block long).

I come home one day, phone is dead. I go to the TelMex office to find out why. There is also (always) a long line for complaints but I had learned to avoid it because the general manager has his desk out in the open; I went to him. He said they had shut off my phone for non-payment. I explained that I had paid it at the bank a couple of weeks previously; he calls the bank, yes it was paid, no we haven't gotten around to sending it to you yet. He turned my phone back on, I assume he managed to get the bank to send the payment.

[Ed Pawlowski]

That has been the fact with every financial institution for the past

100 years. You may get a couple of days grace on the phone or electric bill, but not on a credit card.

Pay the bill on line. You save a trip to the bank and it is there the same day up to a certain time. After that, it is considered the next day. Some us a 7PM cut off date, others can go to midnight.

If you have a Royal Bank VISA, you may have some argument, but most CCs go through a processing facility.

[Pico Rico]

wait until there is a glitch in the system. You better add a couple days for the "glitch factor".

[Mayayana]

It's not the fault of the credit card company. Your bank is holding the money for their own investment. That used to be common in the US. Banks would hold a check for a week of *business days*, which could be about 10 days in some cases. They would take out your money instantly but wait to send it on to the recipient. That gave them a floating pile of cash that actually wasn't theirs but that showed as theirs on papaer. That's not allowed now where I live, but I don't know whether it's a national regulation. In any case, the standard is to mail a check and mail it more than a week before it's due.

[Milburn Drysdale]

My old credit card company did that to me too...so I fired them. Now I use a debit card.

FWIW, my bank provides the same protection on their debit cards as a credit card.

[dpb]

On 4/25/2014 8:09 PM, nestork wrote: ...

Maybe not on the the bill, but you can be quite sure it's in the terms and conditions you signed on applying for and accepting the card.

That's also in the terms and conditions...

...

They do; it's in the contract that you signed if you had only read it in full.

They've already done that; that's how they got the date they did as explained in the T&C on the contract.

That said, I have on the rare occasion when there was a delay not of my fault had success w/ American Express in getting the charge rescinded.

The way to ensure the payment is there on time when getting close to the due date is to use the card's 800 number and pay by transfer directly instead of thru the institution so you don't have the delay for them to process. VISA or AmEx or whoever will have their system set up to initiate the electronic transfer at the time of the call, not when somebody at the bank gets around to entering it.