Pay the late fee, even if it's not fair

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Dear Debt Adviser, I used my credit card company's online bill-paying feature to schedule a payment to them while I was on vacation. The payment was never processed and they have no record of my scheduled payment. I am new at this and did not know enough to get a confirmation number. They charged me a $29 late fee even though I phoned them immediately, explained what happened and paid in full. Several phone calls, e-mails and letters later, they still refused to remove the late fee. I closed the account but did not pay the fee. They continue to bill me for new late fees and interest month after month and have now reported me delinquent to credit bureaus. What can I do now? My husband and I have always had excellent credit. Will this greatly affect our credit rating? I've already requested an investigation by TransUnion, but they decided to leave it as is. -- LoriDear Lori,With apologies to Frank Sinatra and his great song "My Way," your way or the highway doesn't work well in personal finance matters. This is especially true once you have signed a contract to do it their way. One of the hard lessons in money management is that being right isn't always the most important thing. In this case, sticking to your guns and not paying the $29 late fee may end up costing you many times more than that. I would bet that the card agreement that you signed with the card issuer includes a clause that states something to the effect that the card issuer can charge you a late fee if payment is not received on time for any reason. Mailing a bill payment or using a Web site doesn't guarantee that the payment will be received on time. If the mail is late, so are you. The only solution is to pay a bit earlier and to check your bank account to see if the payment went out. I use an automatic e-mail alert on my bank account to tell me when there is any activity. This helps for identity theft early warning and allows me to know when a payment clears. Bottom line, each month you ignore the bill, the cost to you increases. By closing your account, you diminished your influence with the credit card company. If they cared so little for you as a customer that they wouldn't waive the fee, you can imagine that they care even less now that you aren't a customer any longer. My recommendation is to contact the lender and let them know you would like to pay off the balance due. Tell them you will pay the balance owed under protest, but want them to remove the delinquent item from your credit report. Make sure you receive a promise -- in writing -- to remove the item before you make the payment. If you can't get a customer service agent to agree, ask for a manager and be prepared to go up the chain at the bank. Eventually, someone should agree. Be sure to be pleasant. I suggest you characterize this as an unfortunate miscommunication that just needs to be resolved as opposed to say, insensitive gouging. If you have a well-established credit history, this one delinquency will not hurt you that much. If you are new to credit, then it may make more of a difference. Either way, you need to take care of it now. If you decide not to pay, the item will cause you more trouble with your credit as it becomes increasingly delinquent, is charged off by the lender (much more serious) and then is placed with a collection agency and finally an attorney, each of whom is authorized to add collection costs on to your bill. By the way, it won't hurt your husband at all unless this was a joint card, as you each have separate credit records. Life is too short for this stuff. Pay the bill and move on. (Steve Bucci is president of Money Management International Financial Education Foundation. Visit www.moneymanagement.org for additional debt advice. If you have a question for Steve, e-mail debtadviser(at)bankrate.com. The Debt Adviser is a weekly feature of bankrate.com. For more stories visit scrippsnews.com)