Did you know that it is possible to make a credit card payment too early?
Neither did I, but let me tell you about a bank called HSBC.
If you haven't heard of them, HSBC is a very large bank that not only issues their own credit cards to consumers, but supplies credit services to a number of retail stores like Best Buy and Helzberg Diamonds among others. If you have a store credit card in your wallet, take it out and take a look; you'll probably find the HSBC logo somewhere on the back in very fine print.
HSBC has a very interesting payment policy, one that I'm sure is very lucrative for them, but one that costs their customers a lot of money.
The HSBC billing cycle runs completely independently of your payment date. For example, if your payment date is on the 17th, and you pay on the 20th, you are a day late and you'll pay a $39.00 late fee. Now, say you decide to make a double payment to cancel out the late fee and protect yourself from additional interest. You pay on the 20th, after your due date, you make two payments, so you're good for next month, right?
Nope.
HSBC doesn't close out their billing cycle until the end of the month, so even though you paid enough to cover the late payment plus the current payment, it all gets credited to the late payment.
You still owe them for the next payment. And they'll be happy to tell you about it...after you miss the next payment and they can charge you another $39.00.
Their billing system penalizes you for paying too early. In my book, that's a rip off.
So lessons learned:
1. Don't get a credit card from HSBC.
2. If you already have one, pay the thing off and never get another one.
3. Avoid businesses who use HSBC to issue their credit cards and tell those businesses why.
4. If you have an account, make sure your payments go in after the billing cycle ends but before your due date. If your due date falls on the first of the month, God help you because the HSBC customer support surely won't.
The HSBC Credit Rip-Off
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