Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
My husband has his own business, and he does quite well. I spend my time indulging in my hobbies and keeping track of my investments. We travel a lot, and we take our two sons with us most of the time, so they are seeing the world at a young age. Money is not a problem.
My credit score would be perfect except for one thing. About five years ago, we had a personal crisis. In fact, it seemed like everything came crashing down at once. In the midst of doctor's visits and all the stress that was going on, I forgot to pay one of my credit card bills. It wasn't just a few days late -- I forgot it altogether.
The credit card company called to see why my payment was late, and I told them what was going on in our lives. I had every intention of paying them. But they were curt and acted like they didn't believe me. I was so offended that I wished I'd never told them! I swore I would never pay them another dime, and I haven't!
At the time, we owed just over $1,000 on the bill. With interest and late fees, it's several thousand now. I haven't even opened the bill in a long time.
Am I right to not pay them? Why can't they treat people with more respect? Every time I think of them, I just feel more angry. -- Alexandra
Dear Alexandra,
I've had bills like that! I have one right now I can't figure out. I'm an accountant, so I really hate to pay bills I'm not sure about. The people I've talked to on the phone have been impossible, and I'm going to lose my social graces pretty quickly if this keeps up. And I'm not in a major crisis like you were.
Nevertheless, I just wrote a check to clear it up, and I recommend that you do the same. Here's why:
You're not proving anything. Whoever was rude to you five years ago probably doesn't work there now. The credit card company is a huge, faceless organization. You can't "clear your name" because no real person there remembers your name or anything other than what they can pull up on the computer screen at any moment.
One long overdue bill makes a big difference to your credit score. Ironically, it would make less of a difference if your history were not otherwise pristine. It's like the first dent in a new car. What if your husband needs to expand his business and get a loan? Andy Jolls, CEO of Videocreditscore.com, a credit scoring educational site, says, "Even a small bill could ding your credit report enough to make a difference of 0.125 point on a loan, and that will cost far more in the long run."
Plus, hanging on to grievances is a terrible thing to do to your health. Every time you get the bill or field a call, you say you feel more angry. Is it possible that you are transferring some of your energy from the crisis you went through five years ago to the hapless and thoughtless customer service representative? This has to end. You can't get a hold of the nameless service rep and work it out. Let it go.
Jolls says, "I had a friend with a similar situation. He had a $75 medical bill and wouldn't budge. My advice? Pay it off. The question sometimes is would you rather be happy or right? This is a situation where I tell most people to put principles aside so they can be happy. Focus on the bigger picture."
Take care of yourself and your credit. Pay the bill and move on.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: February 27, 2009
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