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Say Goodbye to Late Fees!

March 7, 2011 · 14 comments

in Personal Finance

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.

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{ 14 comments… read them below or add one }

First Gen American March 7, 2011 at 6:32 am

My life was at peak chaos after I had my first son and my mom moved to town. I literally had to deal with bills from 2 houses and 3 apartment rentals. The sheer volume of bills was crazy and it’s then that I started automating bills.

I use my calendar for my credit card. That’s always the one that I seem to forget.

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Kris March 7, 2011 at 6:38 pm

First Gen- did you end up successfully paying all those bills on time? If so, that is quite impressive!

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101 Centavos March 7, 2011 at 6:36 am

I use an old manual method: writing a due date on a post-it note, and sticking it on the bill. The bills then get filed at the bill-paying desk. The date is a few days before the actual due date, for a little bit of schedule float. I’ve never been comfortable with bill paying online.
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Kris March 7, 2011 at 6:39 pm

101- You still write checks and send each bill in the mail? I have a friend that does that too, but I can’t imagine not paying online anymore.

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101 Centavos March 7, 2011 at 6:41 pm

Yep, I still pay by check. I sit at the desk with my iPod on, and write checks, file, update to-do lists, and drool over seed catalogs.
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101 Centavos March 7, 2011 at 6:41 pm

Total dinosaur.
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MoneyCone March 7, 2011 at 10:18 am

Using mint just for the reminders functionality is totally worth it!
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Kris March 7, 2011 at 6:39 pm

MC – I need to look into Mint myself. I have bill dates in my head, but a reminder would certainly help.

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krantcents March 7, 2011 at 12:23 pm

For the payments that are the same each month, I set up an automatic check. Many of my bills are e-bills which remind you automatically. I normally enter bills into the online baking system as I receive them scheduling payment. This works for me.
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Kris March 7, 2011 at 6:40 pm

Krant, sounds like you have it down to a science. Automation is the best!

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retirebyforty March 7, 2011 at 4:31 pm

I have a reminder on Outlook so I don’t forget to pay the bills. I try to set up auto payment as much as possible. This month I almost forgot to pay the cable bill though because we switched provider. That’s one bad thing about auto pilot.
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Kris March 7, 2011 at 6:42 pm

RB40- My cable bill is charged on my cable bill, can you set that up? That way, I get rewards points too.

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Dana March 10, 2011 at 12:37 am

I usually automate the process so I will never forget to pay. However, I still need to make sure that the balance is enough so I set the schedule to fill the balance on each month.
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Kris March 10, 2011 at 8:08 pm

Dana, automation can definitely be great – assuming you have enough in the account to cover it all! :)

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