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Have you ever logged online to review an account , or opened a credit card statement, only to discover that you missed making your payment on time?
Late payments can cause all kinds of financial chaos, from lowering your credit score (depending on how late) to adding hefty fees.
A few months ago, I took our dog to the vet and paid with a seldom used credit card simply for the sake of keeping it active. Since it’s not in my ordinary line-up of bills to pay, I missed making the payment by the due date. The result was a nice hefty late fee of thirty-five dollars.
Luckily, I was able to remedy the late fee with a one-time courtesy fee removal. (Always call and ask.)
However, I did not want a repeat performance somewhere in the future.
Preventing late payments can be simple with some easy to implement strategies.
Set aside a day to manage your finances
Until paying bills and managing your finances are a routine part of your life, you will continue to miss payments, incur late fees and possibly wreck your credit score.
At a minimum, set aside a day prior to pay day to review your accounts, balance your check book, and pay bills.
Out of the ordinary bills (medical bills and random credit cards) can creep into your mailbox. If you don’t have a day set aside to pay them, these are the bills that cause financial chaos.
Put payments on Auto Pay
For routine bills, if your situation allows it, put payments on autopay. Autopay ensures that payments will be made on time, every time.
If auto pay is not an option
Auto pay is not a safe option for everyone. If you are not one hundred percent certain the funds will be available on the due date, this option isn’t for you. There is no point putting a payment on autopay only to overdraw your bank account.
I’m all about hybrid systems.
Set up auto pay for some of your accounts
For all accounts where the late fees are going to be super high (usually credit cards ), set up the account to auto pay the minimum payment due.
Ensuring that a least the minimum due is paid by the due date is an excellent way of preventing costly late payments.
Set payment reminders
It is in your best interest to invest some time and set up reminders on your phone.
In addition, most companies have features where you can opt in to receive text and / or e-mail alerts prior to and on the day your bill is due.
Use an old-fashioned calendar
If you are visual, which I am, use an old-fashioned paper calendar.
This is my favorite method and the one that works best for me.
Go through the calendar and record the due dates for each and every bill that you routinely pay. If the house payment is due on the first, then write house payment on the first of every month.
For non-routine bills, plug them in where you want to pay them.
Write them on the calendar, even if you aren’t able to pay the bill. Seeing a payment due is a great reminder that some action needs to be taken, even if it is calling the company to make alternative financial arrangements.
As you pay the bill, cross it out. A quick look at the calendar will tell you if you have missed paying anything.
A paper calendar laying where it is easily seen, provides a great, ongoing, visual reminder of what bills are coming due.
Change your due date
If the due date of a bill is causing you to make late payments, call the company and see if it is possible to negotiate a different due date.
Sometimes there are just too many bills due all at one time. Changing the due date may help you to prevent late payments.
Good credit scores don’t just magically happen. They are the result of a lot of intentional planning and hard work. Preventing late payments is one big piece of the puzzle in achieving those sought after, high credit scores.
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I’m visual and old fashioned too. But instead of writing in my calendar each month when bills are due, I keep a list in my bill pay folder at my desk. Since I pay bills twice a month the list is divided into two sections and the bills that are due each session are listed. I just glance at it to be certain I covered all regular bills each payment session.
I love lists and that makes perfect sense. Going to have to update my post for two great ideas.
I have my utilities on auto pay but on a credit card each month. That way instead of paying many bills I only pay the credit card when it’s due ! One bill to remember not all the “little bills” (pun intended !) 😊
One bill to remember to pay. That is a great idea and I should have thought to include it.
Thanks.