The Emmys blew through town recently, a blinged out hurricane of designer gowns, diamond jewelry, limousines and swag. Not only do the nominees and presenters get feted with a gift bag filled with thousands of dollars worth of merchandise, but swag suites abound the entire week preceding the event. And the recipients of all this incredible bounty?
Rich, famous people.
It seems counter-intuitive, but one of the quirks about Hollywood is that after struggling and starving to “make it,” you arrive at a point where you’re rich enough to afford anything your heart desires, but despite your bankroll you get it all for free.
Okay, you’re probably thinking, “And what does this have to do with personal finance?” Well, the whole concept of freebies for the rich and famous is very much analogous to something I like to refer to as “The Halo Effect.” Here’s how it works:
I am an exceptionally fiscally responsible person: I don’t have any debt, I don’t spend more than I can afford and I always pay my bills on time.
Except when I don’t.
It doesn’t happen with much frequency, but on rare occasions my brain stops working and I inadvertently forget to pay a bill. Or, in the case of this past May/June, a couple of credit card bills and my rent.
Yes, it was June 3rd before a light went off in my brain and I realized I hadn’t made my monthly rent payment which is due on the 1st. I quickly corrected that error (via bank transfer, as fortunately, my landlord is off in England), but it was several days later until I realized I had also neglected to pay two small credit card bills.
I paid them off and waited for my new statement with the inevitable late fees and interest. I know I deserved to be hit with a hefty fee and the associated interest, but the thought of paying a nice chunk of change for a momentary lapse into stupidity really irked me. Until I came up with a way to magically make those charges go away utilizing the Halo Effect.
When the new statements arrived, I called each credit card’s customer service. I explained what happened (I.E. I made up a plausible story that was more persuasive than “I forgot”…) and asked if they could waive the interest and late fees. Which they did without any fuss because I (almost) always pay my bills on time.
There lies the Catch-22 of the Halo Effect: If you’re the sort of person who needs to catch a break from late fees and interest because you’re always being assessed with late fees and interest, you’re not going to have too much luck employing the Halo Effect to save you money. But, if you have good credit and a stellar financial reputation, you probably don’t need to utilize the Halo Effect.
Sure, getting out of financial hot water just when they’ve caught you in a fee seems counter-intuitive, but, hey, we live in a world where rich, famous people get free stuff all the time. Sometimes these things can surprise you.
If you do use the Halo Effect, remember to use it wisely and sparingly.
Have you ever talked your way out of late fees or other penalties? How did you do it?