I set up automatic payments for my credit card. For awhile I didn't use the card but continued to pay the same amount.  After several months of overpaying, I accrued a fairly large credit balance, about $75.

So, I quit paying the monthly service fee of $6 and 2 months later the card expired. Now, I find I was reported as late paying! The credit card company says that the credit I carried could not be applied to my monthly fees and the credit just remains there indefinitely.

Does this sound right? I don't have much experience in this at all. This is my only card and now my only source of bad credit.