Be honest…do you struggle paying your bills on time? It’s okay. It happens to the best of us. Unfortunately, as common as it might be to make late payments, paying late can come with hefty penalties like fees, higher interest rates, or negative marks to your credit reports. Luckily for you we’re sharing three simple tips that will help you pay your bills on time.
Approximately 40% of Americans were charged a late fee in the past year according to a recent Nerdwallet survey. In other words, in the last twelve months forty percent of Americans paid a bill late. That represents a ten percent increase since 2022 in which thirty percent of Americans made late payments.
Three Tips to Paying your Bills On Time?
If you've made a late payment in the past year, one of the first ways to prevent future late payments is to know your due date.
1. Know Your Due Dates
One of the main reasons people pay their bills late is that they forgot when the payment was due. Again, be honest, how many times have you thought to yourself ‘Oh shoot, I thought that bill was due tomorrow?’
Well, the first step to paying your bills on time is knowing when your bills are due. Towards the end of every billing cycle, companies send statements (via paper or email) that not only detail any recent changes (ie. transactions, previous payments and credits, etc) but also display your next payment date.
Save that Date
Seriously! Save it in your phone, mark it on a calendar, write it on a sticky note-do whatever you have to do to remember that date. Why? That payment due date represents the last possible date that you can pay your bill without incurring a penalty.
By simply knowing your due date you can overcome the biggest hurdle to derails timely payments.
2. Know the Payment Cut Off TIme
As important as due dates are, there is another crucial factor to consider when making timely payments and that is knowing your payment cut off time. The payment cut off time is the time that the company you are making your payment to will no longer accept payments.
For example, imagine you sold your car and you received a cashiers check from the buyer. Your bank closes at 4 PM yet despite your best efforts you reach the branch at 4: 10 PM. Is the bank going to be open? Nope. You’re going to have to try again tomorrow.
In other words, even if you remembered to make a payment on your actual due date, if you pay after the cutoff time, it will be processed the following available business day which could result in your payment being considered late.
When it comes to processing payments every company is different. In a perfect world you can make your payment at 11:59:59 PM with no problems; however, that ‘luxury’ isn’t always available. Every company varies with the cut off times. Some companies stop processing payments as early as five pm. However, generally we’ve seen eight or nine pm as cutoff times. Your specific cut off time can be found in the fine print on your statements.
3. Pay Early
Remembering due dates and cut off times maybe fine for a few accounts, but if you juggle many bills, it can get quite chaotic-especially if you have a busy lifestyle. That’s why, the easiest way to ensure you never have a late bill payment is to simply make early payments.
As stated before, due dates represent the last acceptable day to pay your bill. However, nothing is stopping you from paying early.* So, if you are able to, pay your bill early.
Paying your bills early has many advantages like a potential boost to your credit score and lower interest rates. Yet, the greatest benefit is having the peace of mind knowing you don’t have to worry about that bill until next month.
Bonus Tip
Utilize Autopay
Using the above tips will ensure you pay your bills on time. The only caveat is that you still have to manually initiate your payments. How time-consuming.
Luckily, technology offers us a more convenient way to pay bills through automatic payments (autopay). Autopay is like having an AI assistant that pays your bills for you. Simply enable autopay by connecting a qualifying financial account and sit back while your bills get paid automatically.
Conclusion
At the end of the day all of this fuss regarding late payments is about cash flow. Companies rely on your consistent payments to ensure they have the money to keep operating. This is why these companies use punishments to deter you from paying your bill late. Thankfully, as long as you know you due dates, know your payment cut off times, and pay your bills early you will be able to make your payments on time.
*Some loans like mortgages or automobiles may have prepayment penalties.
