This is a guest post from CareOne Credit, who is glad to help answer any debt consolidation questions.
Does this sound familiar? You’re lying in bed, just about to fall asleep, when you sit straight up and think, “Great, I forgot to pay that bill!” Now comes the late fee which, on average, is $34.35. I can think of a lot of things I’d like to do with that money than give it to the credit company, and I am sure you can too. Besides just giving the credit company money that doesn’t lower your balance, those late fees are also affecting your credit score. The late fees you accrue will limit your access to future credits and are eating into your income. Follow these tips to streamline your monthly bill paying system, and say goodbye to late fees forever:
Get organized! Remind yourself when you need to pay. You may be your own worst enemy if you let your busy life get in the way of paying your bills on time. There are a couple ways to get organized.
If you prefer the manual method:
- Create a bill-paying center. In whatever way works for you – folders or in-boxes – designate space for three things: Bills to be paid, bills to be filed (which have already been paid), and filed bills. By taking this step, you’ll always know where to find whatever you need. Try to designate a day (at least once a week) to go through the “to be paid” folder to check due dates, so that you don’t miss one.
- Go by the calendar. If you’re missing payment deadlines on a regular basis, consider purchasing a 31-day slotted bill organizer. The key to successful use of such an organizer lies in not forgetting to check frequently; otherwise, bills will sit neatly organized but unpaid in their due date slots.
If you prefer email or text:
- Set up reminders with your vendors. Many credit card issuers will send you an e-mail or text alert when your payment is due. Don’t ignore them, thinking you’ll get back to them later. Either immediately put them in an “unpaid bills” folder within your email account, or set up an automatic electronic payment. Most vendors offer to set up a payment for a date in the future, so that you can pay close to your due date.
- Set up reminders through a third-party site or iPhone app. Sites like Mint.com have “Alerts” features that you can use to set up reminders when payments are due. For iPhone users, a real gem (though it costs $1.99) is Bills, which lets you set up “push” notifications for each one.
- Set up your own alerts. Got a utility bill that doesn’t come electronically? It’s probably due at about the same time every month. Use your e-mail calendar to set a recurring reminder, about a week before the due date.
- Automate it. Still need more intervention? Some credit cards allow you to automatically pay the minimum every month, the full balance, or to designate a specific dollar amount that will transfer from your bank account on the payment date each month. It will always be paid, and you won’t ever incur a late fee. If you ever want to pay the remaining balance, or more than the minimum, you can always log onto their website and make an additional payment.
- Consolidate. If you’re losing track because you have too many credit cards, try consolidating the balances onto one or two cards, so that you’ll have fewer due dates to worry about. Beware of maxing out individual cards, though, or carrying a really high balance on just one, because that can be hazardous to your credit score.
- Use your bank’s online bill payment service. Many banks offer the option to pay your bills using their online bill pay services. You can even set up payments to go out automatically each month (such as your mortgage or auto loan payment). If you’re writing the same check every month to the same person or business, have your bank make the payment, and consider it done. (Bonus: You’ll usually be able to see a history of your transactions online, so you can track the payments you’ve made.)
It may be a pain to become thoroughly organized, but think of all the money you’ll save in late fees. Set aside the money you would have paid in late fees and, by the end of the year, you could take a small vacation (or treat yourself to something) with the savings!
From Kris: I could probably stand to be more organized with my bill paying, although I have not incurred any late fees (yet). For bills that I get an email reminder on, I pay them immediately and record it in my checkbook, even if the bill is not due for 2 weeks. Otherwise, I fear I will forget and the late fees/interest will start to accrue.