Everyday Cheapskate: How to Stick It to Your Creditors

Late fees, punitive interest rates, over-limit fees, loading up your credit report with negative information -- it's enough to make you scream!

It's not that your creditors are doing anything illegal. You just didn't understand the power you gave them when you accepted that credit card (it was buried in the fine print). And now it seems like they're staying up nights looking for new ways to stick it to you. If you've just about had enough, maybe it's time for you to turn the tables and get back at them.

PAY EARLY

Nearly 30% of a credit card company's profits are derived from fees -- annual fees, late fees and over-limit fees. You'd think they would be pretty satisfied with all that interest you send them each month. But no. They want more. The days when issuers allowed 10 or 15 days for a payment to arrive after a due date before charging a fee are long gone. Now those fees kick in if you're even five minutes late, and they can range from $20 to $39 per occurrence*.

Get back at your credit card company by making a decision right now to never pay another dime in late fees. Be quick with your payment. Send it in the preprinted envelope that came with your statement (or pay online). Don't enclose a note, use a paper clip, decorate with stickers or do anything that will pull it out of the fast track and into the slow line known as manual processing.

STAY BELOW

Your credit card account most likely has a credit limit. But running up a balance that is anywhere near that limit is deadly for your credit score. The rule of thumb is that you should never be using more than 30% of your credit limit. For example, if your limit is $1,000, you should never have a balance of more than $300 at any time during the billing cycle. Zero balance is even better!

Get back at your card company by creating a wide margin between your balance and your limit.

STOP USING

Your card companies are playing the odds. They know the more you use your cards, the better their chances that you'll go nuts and rack up a big load of debt. When your balance becomes greater than the amount you can pay off in a single month, they've got you. They're doing all they can to encourage that to happen.

Get back at your company by not adding new purchases to your burgeoning load of debt. You'll do yourself a favor and get back at them at the same time.

OPEN EYES

All your creditors know what's in your credit report. They read it regularly. You should too. Part of your agreement with them is that they can check up on you whenever they like to see how you are handling your financial affairs.

Get back at your creditors by staying ahead of them. Manage your credit report by reading it regularly. If you don't understand what it says, ask. And if you see something on there that you know to be untrue, dispute. But don't stop there. If your creditors are punishing you for things on your credit report that were not true, don't sit back passively. Get it fixed, then confront them. Don't back off until they reverse the action.

PAY OFF

Probably nothing will benefit you more than bringing your balances to $0. It's like getting a tax-free raise because you get to keep all that money you've been sending each month to your creditors.

Go ahead and stick it to your creditors by refusing to send them one more penny in interest.

*As of recent updates, the Consumer Financial Protection Bureau has set specific limits on late fees. For example, the maximum allowable late fee for the first violation is typically capped around $30, and subsequent violations within six billing cycles may be capped around $41. These amounts are subject to periodic adjustments for inflation.

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Mary invites you to visit her at EverydayCheapskate.com, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at https://www.everydaycheapskate.com/contact/, "Ask Mary." This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog, and the author of the book "Debt-Proof Living."