My Never-Ending Financial Woes

I Dropped My Cell Phone and Got A Late Fee. What's the Best Way to Handle It?

by Amy Sterling Casil

Financial Frequency. myCash

September 30, 2019 .3 min read

Have you ever felt like you're being $30'd and $40'd and $100'd to death?

For every one of life's mistakes or mishaps, there's a fee, especially when it comes to cell phone and other monthly bills. These little hassles can add up to hundreds of dollars a year that should belong to you and they can impact your credit — companies like Experian are adding utility payments to credit scores.

So what's the best way to deal with them? 

Have a Plan in Place For Unpleasant Financial Surprises

Don't wait for a disaster: have a backup plan in mind for unwanted surprises like a damaged cell phone. Cell phone companies offer you a convenient way to get a new phone, but the convenience comes at a price. 

Banks and credit card companies also charge late payment fees or conceal hidden higher interest rates for convenience features like cash advances. You may have paid your bill on time, but delays in crediting your payment could cause a late fee. Don't just accept late fees or higher interest charges.

How Do I Handle a Cell Phone Incident? 

First, don't panic. Determine if it's really broken.

The phone company would love for you to rush down to their store, hand them your old phone, and allow them to sell you the most recent upgraded device. Don't "say yes to the phone" right away: it's the most expensive alternative.

I learned this myself after several expensive phone upgrades and contracts that seemed like they'd never end. I go to the beach a lot and one day a rogue wave rushed in tsunami-style and swamped me, my beach towel, and my cellphone. 

Fortunately, I had a friend with me. He's an engineer, so he explained how water does its damage and told me the phone could be perfectly fine. I dried the phone with a clean, dry towel, wrapped it up, and left it in a warm, dry place overnight. The next morning, I plugged my phone in and it worked perfectly.

  • Air-dry a wet phone; plug it in after 1 to 2 days to see if it works.
  • Try DIY fixes for a cracked screen: clear packing tape, a screen protector, or a fix-it-yourself kit.

If you have an older phone, keep it as a backup. One of your friends or a family member may have an unused cellphone you could use. Finally, you can choose a no- or low-cost phone from your phone provider, or buy a used, unlocked phone for less than your provider will charge for an upgrade. 

Fewer and fewer people are trading up to new phones, so cellphone providers and phone manufacturers view damage as a valuable business opportunity. Do what's best for you, not the cellphone company.

Turn a Disadvantage Into An Advantage

If your phone is damaged, take the opportunity to shop for a new service provider and save money on your cell phone bills. If you have a contract termination fee, there are several ways to get out of it, from transferring your service to a friend or co-worker to negotiating with your carrier. Look into an MVNO (similar to pre-paid phone service) that offers low monthly bills and allows you to use an older/backup phone. 

So, I Got Past the Phone Issue, But I Got A Late Fee on My Phone (or other) Bill

Many companies don't mind if you pay a few days late as long as you pay and don't complain about it. It's part of many business plans.

Pay on time and eliminate insidious late fees and upcharges when possible. If you receive a late fee, call and negotiate. If you forgot to pay the bill, provide a rationale ("I was traveling for work") or explain that you received a new debit or credit card. Nine times out of ten, the company's rep will remove the late charge from your bill. Be polite and courteous. Assure them that the problem won't recur.

Your credit card interest rate is also negotiable. Most credit companies will waive a fee for a one-time late payment and won't increase interest rates. But you have to contact them quickly and professionally.

How Do I Keep Late Fees From Damaging My Credit?

Damaged credit can result from just one late payment. If you do have a late fee and have to pay it, request that the company not report the fee to the three credit bureaus. Credit reporting isn't mandatory. If you find a late payment on your credit report, you can request the company that reported it to remove it. 

While it isn't automatic, an honest request to a company can result in the negative mark's removal. A major bank charged me a late fee that I didn't owe on a card I had canceled. I wrote a letter to the bank's president explaining that I was a single mom and needed to keep my credit rating up for a planned home purchase. Not only was the fee removed, I received some premium customer benefits that I was eligible for, but hadn't known about before I wrote the letter.

You can take control over late fees and have a backup plan for everyday inconveniences like dropped or damaged phones. With a little forethought, we can avoid these financial mishaps and recover with style and grace.

in this issue

  • safeguard your identity
  • date safe
  • cover your assets
  • protect yourself
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