Abez znow!

Which, in Ukrainian means "So that you know" but really means "So that later on you have no recourse in claiming you didn't know."

I just got my April VISA bill in the mail today. They included $3.54 in interest charges because they said I didn't pay my March VISA bill on time. The "payment due date" on that March VISA bill was April 7th, and I paid that bill at my local financial institution on April 3rd.

It turns out that the Royal Bank considers the phrase "payment due date" to mean the date they have to recieve your payment by, not the date you have to pay by. In my case, I paid on April 3 but the Royal Bank didn't receive the money until April 9th, which was 2 days "late" by their definition of "payment due date".

Needless to say, nowhere on my VISA bill do they clarify what is meant by "payment due date", and so I presumed it meant the day I had to pay by.

But, the kicker is that if you pay two days late, you don't get charged interest on the outstanding balance for two days, you get charged interest at 19.99% for 23 days. That's because the Royal Bank allows a 3 week grace period after they send out the bills for you to pay by. The "payment due date" is the day after the end of that 3 week grace period. If you don't pay by the payment due date, they charge interest at 19.99% for the 3 week grace period as well. So, if you pay the day after the payment due date, you're paying 22 days worth of interest, not one day, or 22/365 times 19.99/100 times your outstanding balance.

I complained about this to someone at the Royal Bank today. I told them that if they don't clarify what they mean by "payment due date", people will presume it means they have to pay the bill by, not the date the Royal Bank has to recieve the payment by, and that's misleading and undoubtedly results in lots and lots and lots of interest charges, which if people are carrying a balance on their credit cards anyway, would probably go unnoticed.

It's only $3.54, but it's the principle here. If you say "payment due date", that normally means the date a person has to pay their bill by. If it takes additional time for the payment to make it's way to it's destination, that's something the recipient should take into account when setting their payment due date.