Check the date

Consumers are slowly discovering that their credit-card companies are playing games with them again, this time with the monthly due date on bills.

Many banks are shrinking the period between the date they mail monthly billings and the date by which customers are expected to make the monthly payment. And they are explaining it to customers with all the candor and honesty of Bill Clinton.

Up to now, most banks have given customers the better part of a month to get their payments in, but the law only requires 14 days. Most banks are not going to that short a period, but many are reducing the payment period from 25 to 20 days.

The shortened period means that instead of money drawing interest in the customer’s account, it will be available for use by the bank. By not leveling with customers about what’s happening, they could rack up some substantial late fees.

Bank of America (BOA), for example, is shortening its payment period. But the bank did not tell its customers that. San Francisco Chronicle writer David Lazarus checked the “terms and conditions” insert in the monthly BOA billing that supposedly explained the change.

It read that customers must switch from paying their monthly billing “by the end of each billing cycle” to “the payment due date each month.” Those who thought the two are the same reckon without the legalese with which banks explain themselves. Nowhere did BOA simply and clearly say, “Your payment period will be shorter from now on, so check your monthly billing for the new due date.”

And even the bank’s terms about billing cycles and due dates, fairly clear when quoted alone as we’ve done here, are buried in verbiage like this: “You will have a grace period for an entire billing cycle on new Category C purchases and new Category D other balances and on Category C and Category D balances remaining from previous billing cycles if you pay in full by the payment due date in that billing cycle and if during the previous billing cycle you paid in full.”

Curtis Arnold at CardRatings.com said of credit-card issuers, “Even if you’re careful and cautious enough to pore through all your mail, and then you notice that ‘Hey, this is something that might be important’ … then you’ve got the problem of deciphering what it means. A lot of lawyers—I kid you not—even they can’t—this credit-card terminology, fine print, terms and conditions—have a hard time deciphering it. And I do it full time, follow the industry, been around since ’98. A lot of times, when I’m looking over fine print—which we really pride ourselves on doing, to disclose that to consumers on our Web site—I have to reread things sometimes several times just for it to sink in.”

He said the corporations probably are intentionally using unintelligible language in order to make customers miss the due date and have to pay late fees.

Arnold also said Citibank is better than other companies in explaining changes to their customers in clear and plain English. And he said Discover is one card that is not shrinking its payment period.

Arnold warns consumers to look at the front end of the payment period also—the clock may not start running when they think it does.

For those responsible consumers who have resisted having their ATM numbers floating around in cyberspace, the changes by the companies are probably also designed to drive them to paying online by making it more difficult to get mail payments to credit-card issuers by the due date.