There have been several ways to improve your credit, but one very easy way to ruin it is to procrastinate on making your credit card payments. One late payment, or it being made just-in-time, may not seem like a big deal to you. To a bank, managing your credit includes being responsible for making your payments on time.
Making payments at the last minute is a habit that is easy to establish, and very hard to break later. A change in pay day because of a holiday, a shift in due date, or the way payments are verified and entered may result in late payments. The thrill of making the credit card payments at the last minute might result in higher fees, late payments, and stress related problems for you personally. A few tips to managing your credit well, and making your payments:
- Make a reward fund for paying bills on line
- Take advantage of auto pay/direct deposit programs
- Use a checklist, or reminders for payments
- Pay the amount from the budget
- Check for tools already in place
Planning for the payments
A checklist of weekly bills to be paid can be its own reward, if you are the type of person that enjoys watching the things you need to do disappear off the list. Even if this isn’t a motivating factor for you, insuring that each bill gets taken care of in a timely manner will remove the possible strain of not wanting to pay it. If you are paid on a time frame that doesn’t suit the billing cycle, a reminder on the calendar will help you remember that a bill is due, so it can be taken care of before it is late.
One reason that credit card payments are late is not being sure how much to pay. There are options for nearly every bill, which may result in internal debates on the correct amount to pay each month. The best strategy would be to pay every bill in full, but occasionally, that isn’t possible or practical. Managing your credit well is much easier if you have an amount that you pay, taken directly from your budget. This way, you know you aren’t going to run short of money, and all the bills are paid
Removing the obstacles
Making sure that the funds are there to make credit card payments and the bills as they come due may be another reason they are not being made on time. Direct deposit has become flexible enough that you can both put savings into your accounts, and have the funds available for any bills. With holidays, direct deposit may allow funds to be available many hours before manually depositing a check would allow. When combined with auto pay programs, either through your bank or where the bill needs paid, you are sure that they are taken care of, making this bit of managing your credit a breeze.
Some places have automated reminder services that you can set up, or other tools that will help. A few places may allow you to make multiple credit card payments, which insures that each pay cycle contributes towards the bills. Some may even allow excessive amounts to be paid over two months. These can be useful until you develop the habits that allow managing your credit well to be automatic.
Check with each payment processor, to verify when payments are finished. Always use the least-favorable time frame to make sure credit card payments are not late. If a bank processes all incoming payments by 10 am, but it takes 24 to 48 hours for a payment to be verified, you know you need to pay that particular bill no later than three days before the due date (48 hours for the payment to verify, plus the 10 am bank section). Managing your credit well this way insures no late payments.
Even with these tips, sometimes it just is more rewarding to have the money in the bank, rather than in having bills paid. If this is an issue with you, set aside an extra fund for each bill that gets paid on time. For each bill paid, a small deposit goes into this fund. Make sure this is in your budget! But having a fund for bills that are paid on time allows you to have the best of both worlds: money in the bank, and the pleasure of having the bills paid on time.
Managing your credit has many parts, and insuring that credit car payments are not late is a major section of an overall healthy credit score, and a ever-growing bank account. With credit managing skills – and a budget that allows you to pay down all of the bills you have – you are well on your way to having the good credit habits that will serve you well in your lifetime.