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3 strategies for paying bills on time

Dear Debt Adviser,
My credit reports evidence no "late payments" or "missed payments" on my credit card accounts. However, I have been assessed "late-payment" fees several times because the payments did not arrive before the due dates. Do these "late payments" affect my credit score?
-- Terry

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Dear Terry,
Generally speaking, creditors do not report late payments to the credit reporting agencies unless they are more than 30 days late. Your payment missing the due date by a few days or a couple weeks will likely have no negative effect on your credit score, but it certainly has a negative effect on your pocketbook.

I am pleased that you are keeping up with your credit reports and that you apparently have no negative information, at least any that concerns your credit card accounts. What I am concerned about, however, is your inability to pay your bills on time and your predicament of paying late-payment fees to your creditors.

Did you know that a late-payment fee of $29 is very often more than what you are charged in interest for the month and, depending on your current balance, can be the equivalent of paying a 30 to 100 percent penalty? Whatever you are paying in interest on your cards is more than enough: Don't add to it by missing payment due dates. You want to keep as much of your money as possible. Your creditors are earning enough. late-payment fees are just a bonus for them.

Sooner or later, you'll slip a little too late and then your credit score will be impacted. So let's get you organized and make life a little simpler and much less expensive! To help you avoid paying late fees in the future, pick a strategy below or come up with one of your own and stick to it.

Strategy 1: Pay your bills the day they arrive in the mail. This works well for people who are not very organized when it comes to bill paying. You do, however, have to be diligent about sticking with the plan. Sit down and write out the check or pay the bill online, even when you don't feel like it and even if it's well before it's due.

Strategy 2: Mark your due dates for credit card bills and other accounts on a calendar in bold ink. Then back up two weeks for a mailed payment or four days for an online payment and pay the bill on that date. For this strategy to work, you will have to be willing to mark the dates on the calendar each month and keep the calendar in a place where you see it every day.

Strategy 3: Determine what time of the month is best for you to pay your credit card bills and contact your creditors and ask that your due dates be changed to that time of month. That way you can pay each bill at the same time and not have to worry about multiple due dates. Watch your statements carefully to assure that the due dates do change.

Making payments on time is one of the best ways to assure a good credit rating. It is also a great way to keep more of your hard-earned money rather than wasting it on late-payment fees.

Good luck!

The Debt Adviser, Steve Bucci, is the president of Consumer Credit Counseling Service of Southern New England. Visit CCCS for additional debt advice or click here to ask a debt question.


-- Posted: Dec. 10, 2004

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