I found out about a nasty surprise this morning -- I was levied a $27 penalty for failing to pay the $34 balance on my Macy's credit card account. More specific, I was levied $25 late charge penalty and $2 interest charge on my failure to pay up. This pretty much equals a 79.4% interest rate on a loan which is, to say the least, absolutely ridiculous.
Some background is necessary to understand my situation (admittedly, I am culprit for the late charge). Because there is a large Macy's store located near my work place, I often frequent the store during my lunch breaks. I am not a shopaholic, but I buy clothing items from time to time. When I purchased a nice jacket a few months ago, I signed up for a Macy's credit card (same as any department store credit card, e.g. Kohl's) to take advantage of the 15% discount they were offering. I paid off that initial charge since but, as I buy things very irregularly, looks like I forgot to pay off the $34 balance that had a deadline of May 20th. As a result, Macy's levied a $27 penalty on my account -- which I found out about when doing a spot check on that account.
After doing some searching online, it turns out that Macy's Credit department often offers customers a grace waiver on their first charge. So I decided to try my luck (per say) and see whether they'd be willing to take off the charge. If they did, I would become a more loyal customer and, if not, I would cancel my card.
First I tried calling the customer service hotline about the charge. This got me nowhere as I experienced a 5-minute wait before a respondent hung up due to a strange inability to hear me. To breakdown the 5 minutes: 3 minutes of waiting time, 1 minute of entering account information, and 1 minute of waiting to key the relevant directory. I did this twice before giving up. What I did find out (despite not being able to speak with the agent on the other side) is that Macy's Credit call centers are all located in India. Or at least somewhere where agents have a strong Indian accent.
After failing to speak on the phone, I decided to hike to the Macy's store to see whether a representative could do anything. I found someone who explained to me they do not handle anything to do with Macy's credit card -- except if I wanted to make a payment on my account. Initially I thought this person wasn't being forthright so I persisted. This led to the manager being called, who voiced the same point. Back to the phone I go.
After another two failed attempts at speaking with an agent, I decided to dial the number from my cell phone. Voila it worked! I was finally able to speak with an agent! However, the agent was a male who spoke with a very strong accent. To make matters worse, he heard me out and offered me a $15 credit if I paid off the account then and there. I persisted a bit by complaining (truthfully) about not receiving any reminders about my credit account. After a couple of minutes, he relented and offered to waive the entire penalty if I paid off the balance on the phone then and there. But I lucked out as I didn't have my checking account number handy (no idea why they do not take my debit card). Finally, he offered me a deal where he credit my account fo the penalty if I went to the store to pay off the $75 minimum balance. Note that the maths don't make sense because (late charge included), my current balance says $95 total (I purchased a couple more things last month). So I argued a bit and I think we ended up on the same page. I am going to monitor my account activities and then hop off to the store.
The point of this blog is to document the tedious process of having penalty charges waived. It can be done, but takes a lot of patience and time. Furthermore, my situation illustrates a classic tactic of credit card companies: they do not send timely reminders (unlike my trusty public library) and probably count on me forgetting to pay off my account. For all the flashy perks they offer --for example, Discover's cashback program-- the penalty fees can be extremely high if you forget or are unable to pay off the balance. 79.4% is ridiculous! Just imagine what if my balance had been higher!
UPDATE 06-08-2011: Problem still not resolved! Looks like I was never credited back the late fee penalty charges. Just tried to call contact customer service again, but my phone calls are not getting through (either disconnected or unable to be heard). Pretty sure I will be canceling my Macy's credit card at this point.
UPDATE 06-15-2011: Hurray! After talking to customer service again a few days ago, I was told they would take off the penalty charges if I made what I owe for the payment. I did that and just saw that my balance has now cleared. Just glad to have this ordeal over with at this point.