Macy's charging interest before it's due

January 4, 2010 12:00:00 AM PST
If you have a Macy's credit card, this story will be important to you.

Shoppers love Macy's and cardholders love the deep discounts that often come with using the charge card. But the monthly billing statements are coming under fire. Macy's is charging interest payments before the customer has the chance to pay the bill.

One bill shows $2.59 added to a $201 charge.

"That happened to me on my very first bill too," says Heather Corsentino of Santa Rosa. "I just got it two months ago. I bought something in Sept. and I got interest on the bill, and it was the very first bill that came in."

Consumer Action's Joe Ridout says he has been getting complaints too.

"It is very confusing because it is money they don't owe, yet it is appearing on the statement. It is though the company is mixing fantasy with reality," he says.

7 On Your Side asked Macys why this was done and they said, "We have eliminated the grace period for Visa and we are obligated under the New Card Act to display the initial interest charge as part of the balance."

This is confusing because on the previous statement, the charge is for the period ending Dec. 6 and the client has until Jan. 6 to pay. Macy's calls these "provisional finance charges."

Ridout calls it silly.

"What's to stop them from adding a provisional late charge of $39?" he asks. "Or, they could originate a provisional collections action even though you have never been late and you are paying on time. Where does it end?"

Macy's says customers can pay the provisional interest payments and get a rebate or just simply deduct that amount from their bill.