I don’t know about you but I hate to owe, however when the situation requires it I will go into debt, then work to decrease it as soon as possible. I’ve been doing a series on “Money Personalities” and thought my latest discovery would fit right in with how the powers that be work to defeat your attempts to get you financial house in order.
Last year I bought a new car after driving my older one so long the salesman accused me of separation anxiety. Not that at all, I just liked the idea of not making car payments and having extra money to do the things that really added to my life. I received a very good interest rate and casually told the salesman of my plan to pay the car off as soon as possible by paying down the principle to decrease the length of the loan. Remember, I hate to owe!
True to my word I began making payments and encountered all kinds of stumbling blocks to making a “principle only” payment. Talking with the customer service reps, who were all quite nice, provided no clear answer: “Pay online, then 
call in to make the extra payment”; “Make the regular payment then wait a day to make the extra payment”; “Make the payment with extra and it will be applied to your account as principle only.” I opted for the last but noticed that the amount I needed to pay each month kept going down.
And then, someone explained to me that rather than applying the extra payment to principle, the well known financial institution was applying it to toward the next payment, and as such I was not experiencing any reduction in principle with my extra payment and they had the use of the money for an entire month interest free!
To make matters worse, I could do everything online but when it came to making a “principle only” payment I was required to phone them, press this for that, and wait for a human to process my payment. Sounds a little underhanded 
doesn’t it? Well, at least to me, and when I reviewed my payment record realized that the only time my extra payment had been applied over the last year was the three times I called in to complain and the rep I spoke with applied the payment!
I thanked the rep for checking with her Supervisor to confirm the “phone in only” procedure and stated for the record (they say your call may be recorded and since they might be listening, wanted to give them an ear full) that due to their procedure I would double my extra payments to get rid of them as soon as possible.
And just so you don’t think I am pointing fingers at this one financial institution, many others do the same. However, they do give you an online option to make a principle payment even if it requires ridiculous multiple steps, or will note your account that any extra payments are to be applied to principle.
Live and learn! But the next time you are watching those funny bank commercials ask yourself: “What’s Being Taken Out of My Wallet ?”