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.