It finally happened. After being in the award travel game for several years, I finally made a major mistake. Now, I’m not talking about the typical mistakes you make along the way, such as miscalculating your spending and missing out on a signup bonus, or missing a payment by a couple days and paying a bit in fees. Sure, both of those hurt.
But not like this. A single missed payment, and my wife’s credit took a major hit.
The Impact of a Truly Late Payment on Your Credit
While I’ve missed payments before, it’s definitely not the norm. Ever since we started using YNAB (You Need a Budget) for tracking our accounts, I’ve really been on top of things. It’s easy to budget, easy to add purchases, and easy to see what you’ve moved to pay off your cards. I really like it.
Except when things go wrong. Along the way, I hadn’t noticed that one of my wife’s cards with Barclay’s bank was no longer “connected” to YNAB. For nearly all of our accounts, we have them synced to the bank. What shows in YNAB is typically no more than a day or two behind what you’d see if you log into the bank website.
But every once in a while things become unlinked. This has happened primarily with my Discover Card, Barclays cards, and Citi cards. And the issue with the Barclays cards what what came back to bite us.
You see, I’d intended for my wife and I to both close our Wyndham cards last fall. I closed mine, and I was 90% sure that she’d closed hers. We’d made a couple phone calls to close some accounts, and this was supposed to be one of them.
Except it hadn’t actually closed, and it was disconnected from YNAB. This meant that when the fee hit, the balance didn’t show. Things still reported $0 across all the cards, so I didn’t bother to log into YNAB and check.
My Fatal Mistake
You might be screaming, “Why don’t you have your accounts set to auto-pay?!?” Fair point. Personally, I’ve never liked it. I tend to move money between accounts fairly regularly, and I make our card payments based on the most critical at a few different points through the month. It’s a system that has worked.
But in this case, everything failed. The account wasn’t actually closed. YNAB didn’t show the annual fee was charged. I didn’t log in to check. And the emails that Barclays sends to remind you to pay, or that you’re late, were missed entirely. I have most set to an account that I share with my wife, but this account is fairly old and still sends to her personal email. She totally missed it.
The fee posted in September, and I didn’t catch the issue until December when I checked her score through Credit Karma. It showed a massive 92-point drop month-over-month. Sure enough. When I checked the report, the account showed 30 days past due.
As I’m the one who handles paying all the cards off, the blame for this one rests squarely on my shoulders.
What Do We Do Now?
I felt awful. We’ve both had utterly impeccable credit for years, and this was the first time something had hit our credit report. Sure, we had a lot of new inquiries, and every once in a while one or both of our scores would dip due to utilization (usually in Q4 when I’m doing the most easy reselling). And of course I had to mess up hers and not mine.
Time should fix things, though. At this point, we’re holding off on new applications that will hit her credit. The good news is that from December to January, the score rebounded 17 points. I hope that the trend continues and the effect wears off. I’m not sure how long it will take to get back into the 800s, but if she can at least end up back in the excellent range this year, that would be fantastic.
I write this as an honest account of the mistakes you can make in this hobby. We’ve done so well in this world of award travel, getting to see places and experience things we never would have been able to without miles and points. But the organization and diligence that you need to posses cannot be understated. A hit like this to your credit hurts. But it is ultimately survivable.
Just wondering if as a result of this issue have you now setup auto payment as a backup to your manually payment system? That way if something goes awry, the auto payment will prevent any issues. Just my two cents
I’ve thought about doing this on all the cards that we don’t use frequently. For the ones we use all the time, missing a payment is unheard of.
Any late payment was probably unheard of before this, but now it’s happened… I don’t understand the reluctance of setting up autopay as a backup as Dr Bob suggests. If you pay your cards off manually, then autopay doesn’t trigger. Your system has a large flaw that just reared its ugly head. Up to you if you prefer to leave yourself open to it in the future.
That’s the risk of carrying a loan shark in your pocket. Listen to Dave Ramsey and get rid of your credit cards. Never have this issue again.
I would agree if I was paying loads of interest month after month. Even with this mistake, I’m not (and we didn’t have to pay a late fee or interest on the missed annual fee). I get more out than I put in, so using a card is a win for us.
I was at 660 Experian told me I needed 29 points to do my refinishing next thing I noticed they dropped me 31 points for no reason asshiles
Many factors contribute to your score. Most of the time it is a computer producing the number by algorithm. Maybe talk to the lender and see what you can do to increase your score again?
I had a similar circumstance last year. I paid a card on the due date then the next bill showed a late fee and interest charges. I called and was told that the charges would be removed so I left it alone. A few weeks later my credit score dropped 80 points because I was “late” in paying the card. The company had not removed the charges as promised, but it was my fault for not checking up on things.
You just can’t just trust any compna
I have a similar story with a BofA card. Told me they’d remove the charge before end of cycle. Didn’t happen. it didn’t hit my credit report cause I paid it, but the interest and fee were annoying.
Been there. Done that. Sigh.
It’s certainly frustrating. How I hope her score rebounds over the next several months.
Why don’t you call and write to Barclays to ask them to remove the late from your credit report? After all it was just an annual fee.
The way I handle this situation is through paper statements. I’ve missed a credit card payment by a few daysIn the same situation (and caught it bc of the paper statement) . I also don’t use autopay for a variety of reasons.
I’ve thought about it. By the “letter of the law,” we don’t have a leg to stand on. But they may consider our case. Who knows.
See if by goodwill they’ll remove it since you’ve always paid on time
I am a 25 years credit card churner with a ton of credit cards for my wife and I at any time. I used to also hold a ton of cards for my parents, but my father died 7 years ago and my mom is 91 and living with my sister, so they are out of my portfolio now. BUT, I AGREE WITH YOU, I ALWAYS HAVE PAPER STATEMENT SENT TO MY HOME. IT IS MY BACKUP. This keeps me from missing anything.