If you open up your credit card statement, you might be in for a surprise if you learn you have a late fee. These credit card fees can easily accumulate as you become so busy with your day-to-day tasks and responsibilities that you forget to make your payment. It's common for creditors to charge up to $35 for late fees even when you missed the due date by only one or two days.
Consequences of Late Fees
Not only will late credit card payments mean more money due on your next statement, it could also result in your interest rates increasing and credit score decreasing. Since your payment history represents a large portion of your credit report, a late payment or two could affect your score more than you anticipated. If a payment has gone unpaid for 30 days past due, you may be marked delinquent and this negative item could remain on your credit report for seven years.
With the risk of incurring credit card fees, consumers have various ways to guard against late payments.
Here are three ways to avoid credit card fees:
1. Modify Your Due Date
Some credit card companies will allow you to change the date when your payment is due. Although this will not go into effect until one or more billing cycles, depending on your creditor, there are several advantages to doing this. If you have the habit of spending most of your pay check well before your credit card bill due date rolls around, you might have a higher chance of getting a late fee because you have insufficient funds. You could set your new date to one you will easily remember.
You could also move the due date to right after you get your pay check and ensure that once you receive your income, you will have enough money to pay the minimum or full balance of the card. Before your new due date goes into effect, you will still have to pay your bills on the due date currently on your statements.
2. Set Calendar Alerts
Once you modify your payment due date, be sure to note this to avoid late fees and other charges. You don't want to pay your bill and then realize that you actually changed it to an earlier date. There are two effective ways to make it easier for you to remember your due date. Either have your credit card payment due date as a recurring event on your personal calendar or you could input the date in a budget management system.
These programs often allow you to get reminders either through email or text to know when your due date is wherever you go. If you still have trouble remembering, set up automatic billing to make sure you're always on time.
3. Be Mindful of Processing Times
While you have different options for making a payment for your credit card, it's still a good idea to be sure how long the transactions will take to process. Although making payments online will be quicker than mailing in a check, ensure that you submit the money ahead of time of the due date just in case the credit card company takes a few days to process the payment.
You should also continually monitor your bank account just in case you don't have enough money in your balance to pay off your credit card bill. If this is the case, give extra days for transferring the money into the bank before you plan on spending it for your credit card payment.