If you’ve ever paid your credit card bill late, you’ve likely endured both hassle and expense. Not only are you charged $27–$37 for each late payment, but your credit score could take a hit, too. If your payment is behind by 60 days or more, your penalty APR might also kick in — causing your interest charges to skyrocket overnight.
One way to avoid this mess is to shun credit completely and use debit or cash instead. The downside here is credit cards provide protections and conveniences debit cards can’t. Plus, you’ll miss out on the myriad perks only credit cards offer, such as purchase protection, price matching, rental car insurance, and extended warranty programs.
The better solution for most people is to find a way to pay all credit card bills early or on time. That way you can leverage credit for the perks and rewards without ever having to worry about fees, surging interest rates, or credit score dips.
Often, this is a matter of getting organized and making payments automatic. Check out these five ways to foolproof your finances so you’ll never pay late again.
1. Set Up Auto-Pay
If you’re worried you’ll forget your payment due date altogether, setting up automatic payments is smart. Most credit card issuers offer this payment option, but you can also set up auto-pay through your bank. When you sign up with your card issuer, you’ll get to decide when and how much you want to pay. For example, you can choose to have your checking account automatically debited on your due date, or on some day before then. You can also opt to pay the full bill amount, a fixed dollar amount, or only the minimum payment.
Obviously, this strategy comes with huge advantages. Since your bill is paid automatically, you don’t have to worry about remembering to pay it. That means you should never be charged a late fee or have a late payment show up on your credit report. Even if you set up the system to pay only the minimum payment, you can always log into your account and pay your full bill later.
On the flip side, paying your credit card bill automatically does come with drawbacks. If you have a history of overdrafts on your bank account, for example, setting up automatic payments may be hazardous to your finances. For automatic payments to work, you need to have the money in the bank to cover your payments every time they’re deducted from your bank account. Otherwise, you’ll be hit with a fee from the bank for insufficient funds, a late fee from your credit card, and possibly an additional fee for a payment not going through from your credit card as well.
Setting up auto-pay may also be a bad idea if it lulls you into not looking at your bill every month. Not only can you miss fraudulent charges on your account, but if you’re struggling with debt, the last thing you need to do is avoid seeing your bill every month. If you set your account so the minimum payment is paid automatically, you may not even realize if your situation gets worse.
2. Pay Your Credit Card Bill Multiple Times Per Month
If you’re fairly good at remembering your credit card bill but lax when it comes to your actual due date, paying your card off several times per month might be the answer. For some people, it’s easier to get into the habit of paying their bill once a week, or whenever they think about it, rather than waiting for one due date at the end of the credit card billing period.
The convenience of the Internet and mobile bill pay has made it possible to pay your bill at any time and any place of your choosing. By paying your balance every time you get the chance — and whether it’s due or not — you can avoid late payments altogether. And since you’re constantly aware of your growing balance this way, you might be more inclined to stay on budget as well.
The downside to paying your bill several times per month comes when you get busy and forget. If you can’t remember to pay your bill on your due date but still want to pay multiple times per month, it might be wise to set your account to pay your minimum payment automatically as a stopgap measure. Then, you can log into your account and pay your full bill each time you get the chance.
3. Change Your Due Date
If you have several bills and each has a random due date, it can be hard to stay organized and keep each bill on track. Fortunately, most credit card issuers will move your due date to any date of your choosing. Most of the time, all you have to do is ask.
This strategy can come in handy if you have another major bill you can’t afford to forget. If your rent payment or mortgage is due on the 4th of the month, for example, you could move your credit card bill to the same date and pay them simultaneously.
The benefit of moving your due date is you’re more likely to remember to pay if the due date coincides with other important bills. The downside, however, is that you will have to have funds to cover several payments at the same time. If you’re living paycheck to paycheck, it may be hard to cover a large sum at one time.
4. Try Debitize
Debitize is a free service that helps consumers enjoy the benefits of credit without risking late payments or debt. It works by linking your checking account with your credit card accounts, and then automatically setting aside funds as you make purchases with credit.
Once your accounts are linked and Debitize starts deducting amounts equal to your credit purchases from your bank, your credit card works more like a debit card. The fact that Debitize “turns credit into debt” in this fashion makes it immensely helpful for anyone who wants to avoid late payments and stay out of debt.
Debitize also offers additional protections that can help consumers avoid an overdraft. For starters, you can set a minimum balance on your checking account so you always have enough money left to get by. Second, Debitize lets you set up custom notifications so you’re alerted when you reach a certain spending threshold or if unusual activity is reported. Lastly, Debitize pays your bill automatically for you, leaving zero room for error on your part.
The notable downside to using Debitize is the fact that you’re surrendering some control. You may not like having a third party deduct money and pay bills on your behalf. If that’s the case, you might be better off using one of the other recommendations on this list.
5. Sign Up for Payment Alerts
If you’re afraid you’ll forget about your credit card bill and need a reminder, consider setting up some automatic nudges. Through your bank — or through a service like Mint.com — you can get automatic payment alerts on certain dates of the month or when your payment is almost due.
This strategy can be truly beneficial for someone who is financially responsible yet prone to forgetting their bills. Once they receive their automatic reminder via text or email, they can log into their account and pay their bill right away.
Obviously, setting up payment alerts can only take you so far. If you’re someone who forgets easily, even setting up a reminder may not be enough to help you foolproof your credit card bills. After all, you still have to physically log into your account and pay your bill yourself.
In that case, you may be better off setting your bank account to pay your minimum monthly payment automatically as well. That way, you’re covered even if you forget.