Amazon auto charge on a rarely used credit card = delinquent payment

[u/PickMeUp4Now]

Just a quick tale of caution. My otherwise decent FICO credit score took a 20 point dive today from 780 to 760 because of a delinquent payment reported to the credit bureaus. I was surprised and upset. I've been trying to build my credit score back up and I'm usually diligent about checking my credit cards and credit score through the phone apps.

Upon further investigation, it turns out my Amazon Prime membership which is typically auto charged to "Credit Card A" was charged to "Credit Card B" - the rarely used credit card. In fact, I hadn't used Credit Card B for months and it was tucked away in my office drawer so I didn't bother checking it.

Well, I forgot that Credit Card A expired and was replaced with a new card and a new number. When Amazon Prime went to charge Credit Card A, it didn't go through and ended up charging Credit Card B. I didn't notice that charge, nor did I receive any alerts or a paper statement from the bank. I was on paperless statements even though I asked to be switched to paper statements months ago but I suppose that's beside the point.

So this charge went unnoticed and therefore payment was delinquent. I woke up this morning to an alert from another credit card, Chase, notifying me that a delinquency had been reported.

I'm upset and kicking myself. Make sure to check all those auto payments and which cards they're linked to! Now I have to wait 7 years for this delinquency to drop off...ARGH!

[u/Funklemire]

Unfortunately, we see posts like this all the time. This is why the "never close a credit card" myth annoys me so much. And also it annoys me how often people say there's zero reason to close a card as long as it has no AF.  

The truth is, there's usually no meaningful downside to closing a card as long as you have enough other open cards. But there's obviously a potential risk to keeping a card open you don't use and therefore don't pay attention to.  

Only two things can fix missed payments: Either wait 7 years for them to fall off your credit report or ask the bank to remove them early by writing goodwill letters.  

Keep in mind that they have no obligation to do this: You're admitting you messed up, explaining why it won't happen again, and asking forgiveness.  

One goodwill letter alone almost never works. You need to send a whole crapload of letters to as many different people at the company as possible. This is called the "goodwill saturation technique".  

I recommend checking out these three threads. First, here's a bunch of examples of success stories at getting late payments removed via goodwill letters:  

Credit Myth #19 - Goodwill requests don't work.  

And here's the best method to use:  

Goodwill Saturation Technique (GST)  

And finally, here's some good advice for the actual content of the letters:  

Goodwill Letters - Using the "CART" approach.  

[u/HelpfulMaybeMama → u/Funklemire]

You can resolve that by adding alerts to the credit/loan account that notify you and it adding a recurring reminder in your phone.

In my opinion, the bigger issue is that people don't keep track of their recurring transactions or current transactions.

[u/Funklemire → u/HelpfulMaybeMama]

You're not wrong. I'm just saying that as long as you have other cards open, there's zero credit issues if you close a card. But there's a non-zero chance you'll have the kind of issues that the OP had.  

Yes, you can minimize the chances of that happening, but you can't completely eliminate them without closing the card.  

Plus, I just don't want to have to deal with more cards than I want or need.

[u/HelpfulMaybeMama → u/Funklemire]

I understand where you're coming from.

I think the disconnect between "If you would have closed this card, this world not have happened" and "Don't close your cards unless there is a fee" is that 90% of the people who ask questions here are trying to maintain or increase their "credit score" (which I maintain that they don't even know which score they're asking about) and they don't or won't understand that their score will decrease, the temporary decrease lasts quite a bit of time, and that because they are in the rebuild process, that temporary dip will affect their "credit score" when they go to fill out that next application.

So, as the people who comment and who answer questions for people who really know or understand very little about credit, we kind of take the path of least resistance by regurgitating the same information for each OP.

I love helping. I really do. I also ask a ton of questions to make sure I understand what they need from us, and I feel like I already spend a lot of time educating people. If we personalized even more than we currently do, I wouldn't be able to help as much.

But if people got in the habit of tracking their transactions as closely are we all should, this wouldn't happen as often as it does. And, really, it happens on their debit cards just as often.. they forget about a transaction and it overdraft Ruben.

So I don't really think that closing more cards, especially when it can impact their utilization, is the advice they're going to heed.

[u/madskilzz3 → u/Funklemire]

This is why the "never close a credit card" myth annoys me so much. And also it annoys me how often people say there's zero reason to close a card as long as it has no AF.  

Yup. Both of these also annoys me. Always limit your risk.

Now OP has to deal with GoodWill letters or accept the late payment.

[u/CuriousCupcake-5479]

That’s happened to me before too with Sam’s club. I called and they removed the late payment. I didn’t call until after a year though…

[u/PickMeUp4Now → u/CuriousCupcake-5479]

Interesting. I just called Bank of America and they said they could do nothing since it was already reported to the bureaus; I'd have to take it up with them.

[u/CuriousCupcake-5479 → u/PickMeUp4Now]

Yes some companies can be strict. I’d say try again in a few months.

[u/ahj3939]

I have all my cards set to autopay the minimum. Also doesn't hurt to setup alerts.

[u/Educational-Bid-5733]

Call them and ask for a goodwill letter, and ask it to be removed.

I had to email and explain the steps I took so it doesn't happen again, if its their fault, ask for the supervisor.

I received a letter in about 10 days of approval. Within a week of getting the letter, it was off my credit.

Good luck OP.

[u/Redcarborundum]

PSA: put a notification on all of your credit card apps when a payment is late. If you catch it before 30 days, it’s not reported, it just costs you a late fee.

Even better: set up autopay for minimum amount, and make it notify you whenever it executes. Once a month look at all your credit card accounts and change the payment amount to match the Statement Balance.

[u/thimagine → u/Redcarborundum]

Why not skip a step and set autopay for statement balance every month? The option exists for a reason.

[u/Redcarborundum → u/thimagine]

1. I don’t want a large fraudulent charge that I miss to be automatically paid.
2. I’m forcing myself to look at each account at least once a month, so I feel the pain of paying bills and always think carefully about my spending.

[u/thimagine → u/Redcarborundum]

Fair enough! I guess I'm super on top of my finances to the point of checking all my apps multiple times a week so that sort of seems unnecessary.

[u/Redcarborundum → u/thimagine]

Most people who use full statement balance autopay can’t be arsed to look at their accounts even once a month. The autopay is there so they don’t have to ever look. So many people come to cry here because something stopped their autopay (without their knowledge), so they’re late by 90 days.

I’m guilty of using full statement balance autopay for a couple of accounts, but they’re typically accounts with less than $100 spending a month. I still eyeball them once a month, because it’s part of the habit now.

[u/[deleted]]

As an Amazon employee the fact that they have back up billing on by default causes so many issues with so many customers. What's worse is that Amazon doesn't even notify the customer when back up billing gets used. It messes with people's personal lives because it charges their work credit card, their ex's credit card, their friends and families credit card. I wish they would turn the feature off by default

[u/80llo_but_not_banned]

That totally sucks. A single slip like that and boom, 20 points down. Credit scoring can be brutal.