Several years ago, my wife and I decided to make some changes to our credit cards. It was so long ago and insignificant in the big picture that I cannot recall the exact reason for it.
I believe we wanted to have a second credit card should an emergency situation arise or we find ourselves at a location that did not accept the type of credit card we had in our possession. Therefore we decided to try out one of the many credit options that annoying companies routinely pitch to potential clients over the telephone.To my surprise, we received a bill for the annual use of the card. “Use of the card” is actually an understatement because I rarely use any credit card unless I am on a long-distance trip. The reason for my hesitancy is I was stupid when I was very young and overspent my ability to immediately pay off my credit card purchases. Due to my financial situation at the time, it took about two or three years to pay off the principal. Since that time – and thanks to my wife who also serves as my financial advisor – I have always paid any credit card balance as soon as the statement arrived. There has been the odd time when I misplaced the paperwork and therefore had to pay one-month’s interest charge. Such oversights occur rarely and really bother me because of the high monthly interest that I paid as a young man. It was nothing short of legal loan-sharking and came at a time when I simply could not pay off the principal. It was a lesson well learned. Getting back to the second credit card I acquired, I was not impressed when I learned it had an annual fee. Therefore, I politely told a company representative that I had never in my life had a credit card that came with an annual fee and will never use such a product. I told her that I was immediately cutting up my card and would not pay a fee to use their credit card or any other credit card for that matter. I think I also put a short message stating my sentiments on the statement the company had sent and mailed it back to them. I put it out of my mind and life went on . . . and on. Then, last week my wife informed me that I had better contact that credit card company because they have continued to mail me monthly statements for many years and the $12 fee that had been billed to my account is now up to $71 thanks to compound interest. To make the story even better, my wife had somehow overpaid when she cancelled her credit card and had a one-cent balance. She contacted the company and told them to keep the penny, but the firm has continued to mail out monthly statements ever since informing Angela that she has a one-cent credit. I don’t know what it has cost the credit card company to continually remind her that she has a positive balance, but I would speculate that it’s somewhere in the range of $71 when the postage, paper and envelopes are factored in. When I phoned the financial institution in hopes of rectifying the matter and finally got through to the company directory, I was politely thanked for my telephone call and informed that there were no representatives available. I was told to call back at a later date. For me, ignorance was definitely bliss in this case as I was unaware of the monthly statements that have been sent to us for several years. The latest development is actually humorous and made me chuckle. Angela received another monthly statement and this one informed her that her penny credit will be sent to the Bank of Canada because the account is inactive and the statute of limitations is expiring. The Canadian one-cent coin was eliminated because it cost more to produce it than it was worth, but it’s obvious that even a penny can inflict significant losses for a company that is unable to deal with trivial matters. Is it any wonder our financial world is in a tedious state? I have not calculated the interest that would compound on a penny, but a person would suspect that if a $12-fee can increase to $71, a one-cent credit should likewise compound to at least six cents. It’s sad to say that even six cents isn’t enough cash to entice Angela to respond to the ridiculous credit card game that has played out. For the record, Angela’s penny will be held in trust by the Bank of Canada for 10 years, after which it will go the Receiver General. Her saga won’t end until another decade has elapsed. I wonder what will happen to my $71 debt in the next 10 years. Note: Balances of $1,000 or more are held by the federal bank for 100 years before being transferred to the Receiver General. As of December 2013, approximately 1.4 million unclaimed balances, worth some $532 million, were on the bank’s books.