We're guessing that paying your bills isn't high on your list of favorite tasks. However, rushing through it or putting bills off can cost you — big!
Here are six mistakes you may be making when it's time to pay your bills and what you can do to make the bill-paying experience more pleasant/less stressful.
This is no secret. Paying your bills after their due dates can hit your finances hard. Late payments lead to late fees and can potentially damage your credit score, which can drive up the interest rates you pay on everything from credit cards to your mortgage. A higher interest rate on your mortgage can cost you thousands of dollars over time.
So if you frequently miss due dates:
Always double-check your bill for the correct payment amount to avoid over- or underpaying a bill. Underpaying a bill can cost you late fees and possibly ding your credit. And if you've ever over-paid a bill, it will take time to get your money returned to you, which can be a hardship if you're on a tight budget or struggling financially.
Make sure you are paying the correct company or service provider to avoid having your payment go to the wrong place. If you have two or more accounts at one company — a car loan and a mortgage payment, for example — make sure your payment gets credited to the correct account by including the account number with your payment.
There's a Chinese proverb that says, "The faintest pencil is better than the sharpest memory." Not keeping a record of payments can lead to missed or duplicated payments. A written record helps to avoid these mistakes. Your check register, a spreadsheet, or your payments written down a dedicated notebook will suffice.
Taking the time to read through bills and thoroughly understand what you're paying for will ensure you're being accurately charged. When you're not reviewing your bills regularly, you might miss mistakes that could be caught and disputed. Your billers may even raise prices without you realizing it!
We're aware of a member who was paying her credit card bills in full without checking the charges. Many months later when she looked more closely at her bills, she spotted a large fraudulent charge. By the time she noticed it, however, her card issuer told her it was too late to open a dispute and get her money back. She lost several hundred dollars as a result.
Keep in mind that your bills may also contain time-sensitive promotions and opportunities for discounts; you'll miss out on them if you're not reading your bills thoroughly.
Bills, bills, bills! It's easy to let them pile up and then have to dig through a pile looking for the right bill to pay. Instead, consider going digital with your bills. Many billers have apps that accept payments or will let you pay through their websites. At Hanscom FCU, you can have bills sent directly to your Bill Pay in Online Access, where you can view the invoice and get an alert when payment is due.
As we mentioned above, you can schedule payments so you're never late. Scheduling bills to be paid by their due dates will give you peace of mind and it takes minimal effort. As a bonus, when you use bill pay, you'll have a record of your payments you can refer to in the future.
Do you have any tips for avoiding bill-paying mistakes? Add them below!
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