Tip 88: No more late fees
Late fees for paying bills late drive me crazy. These fees provide essentially pure profit
for the credit card companies and utilities that charge the late fee. How much does it cost a big company if your
check arrives a day or two late? Almost
nothing, but late fees can be $30 or more.
Plus credit card companies can raise your interest rates as a result of
a late payment. But wait, there’s more-
credit card companies turn in late payment reports to the credit card reporting
agencies, resulting in a lower credit score.
Don’t let this happen to you!
Your goal should be to pay $0 for late fees.
I like to set up my utility bills on automatic payment. I still get a bill, but the money comes out
of my checking account automatically when it is due. This way I still get to see how much I need
to pay and still have a chance to check my bill before the payment comes out of
my account.
I use a computer bill paying system on the website of my
credit union. This way I can see the
date when I last paid each credit card and other bill. This helps me to notice if I have not
received a bill and avoid late payments.
Many years ago, I remember once having to send a check by
FedEx overnight to avoid a late fee on a credit card. Now most bills offer pay-by-phone or
electronic funds transfer options so you can pay bills at the last minute
without paying rush shipping to send a check.
Some of the electronic payment options do cost a few dollars, but still
much less than a late fee.
One common reason that people pay bills late is that they
misplace their bills and do not notice that the bill is due in time to pay it
on time. With electronic banking, it is
so easy to pay bills that I often log in to my bank account and pay bills
within moments after opening the envelope.
When I am busy and can’t pay a bill at that moment, I have a special
drawer where I keep all bills that need to be paid.
Other late fees that I have seen are charged for returning
rented or borrowed items late. Library
fines and late return fees for movie or video game rentals come to mind. These late fees are usually much smaller than
late fees for paying bills. Still, it is
easy to avoid paying late fees by keeping track of when items are due
back. I usually return rented movies
immediately after watching them so I don’t forget and end up with a late fee.
A little organization can go a long way to avoid late fees.
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