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From mortgages to car payments to cellphone bills, most of us probably have more monthly bills than we’d prefer.
Because many creditors share your payment information with the three major consumer credit bureaus — Equifax, Experian and TransUnion — falling behind on your bills could negatively affect your credit scores.
Making late payments could also lead to late fees and penalty (higher) APRs on credit cards. Read on for some tips that can help you make your payments on time.
- Make a list of every bill
- Find out when your payments are due
- Add your payments to a calendar
- Decide how much you want to pay
- Set up automated payments whenever possible
- Devise a system for manual payments
- Sign up for reminders
- Worried about paying your bills because of COVID-19?
1. Make a list of every bill
It’s almost impossible to pay all of your bills on time if you don’t know all of your obligations — so identifying all your creditors, vendors and service providers can be a good place to start.
If you have a lot of bills to pay, some can fall through the cracks. To help avoid this, check your credit reports and list every lender (leave out accounts that are paid off). Next, review recent bank and credit card statements to add any recurring obligations to your list. This could include gym memberships, cellphone bills, media subscriptions, online services (like music or other apps) and utility bills.
Your list should include the lender or service provider, the minimum monthly payment and total balance due. Once you’ve got your list, consider separating bills into two categories: those that can be paid automatically and those that can’t.
2. Find out when your payments are due
Once you’ve got a list of bills to pay, find out when each bill is due and add that to your list. If your due dates are all over the place, you may want to tweak them to make tracking payments easier.
Many creditors allow you to pick or change the date you pay, so go online or call to find out.
While changes may take a few billing cycles to go into effect, having the same due date for multiple bills can simplify your life. And it can be helpful to set up your bills for right after payday if you’re concerned about overspending and not having enough money left to pay them later.
3. Add your payments to a calendar
Tracking your bills’ due dates through a calendar or other system can come in handy.
For example, if you use an online calendar, you can add payments there. It’s usually easy to add recurring events, and your calendar app may have handy tools (like color coding), so due dates stand out from other events.
4. Decide how much you want to pay
For some of your bills, you may have to pay a set amount. Others — including credit cards — may allow you to pay as much or as little as you want after making the minimum monthly payment.
Ideally, you’d pay the full balance due on all your bills every billing cycle, even on the credit cards and other accounts that allow you to carry a monthly balance. This may not always be possible. But for accounts that allow you to carry a balance, you may decide to pay more than the minimum to help you save on interest, avoid building up unnecessary debt or potentially become debt-free faster.
If you’re going to pay an amount other than the minimum or full balance, note this on your list of bills to keep track of the situation.
What are minimum monthly payments?
A minimum monthly payment is the smallest amount of money due each month to keep your credit card account in good standing. Most banks determine the minimum payment by calculating 1% of the total balance owed.
5. Set up automated payments whenever possible
Armed with your list and your calendar, it’s time to set up your payment system.
One approach is to pay as many bills as possible automatically.
When you set up automated payments through creditors, you can specify whether you want them to debit the minimum due, the full balance due or another amount (if the accounts allow it).
While many lenders accept automated payments from bank accounts, you may also have another option for certain monthly obligations — charging your regular bills to one of your credit cards.
But it’s best to use a credit card to pay your monthly bills only if you’re confident you can afford to pay the card on time and in full. Otherwise you may build up a balance that will charge you interest — and that could undermine your efforts to stay on top of your bills.
6. Devise a system for manual payments
While it can be a good idea to autopay as much as you can, you may not be able to pay everything automatically — or you may not want to. So for those bills you pay manually, you can set up a separate system.
- Pay your bills immediately. If you take this approach, the goal is to pay the bill right away. You can go online and make a payment as soon as your statement posts or bill arrives — or you can sit down and write the check, put it in an envelope and drop it in the mail the next time you go out.
- Pay your bills on a certain day each month. If you don’t want to jump online every time you get a bill or stop what you’re doing to write a check, you can set aside a regular, recurring time to pay your bills. It may help to schedule a block of time on your calendar. But even if you take a less formal approach, try to make it part of your routine.
7. Sign up for reminders
Whether you autopay or handle bills manually, it’s helpful to be reminded when bills come due.
You can remind yourself to make a payment or to check if an automatic payment cleared.
Your own calendar reminders may be enough. Another approach is to use a specialized app for organizing your money and reminding you about bills. You may also be able to sign up for alerts directly with creditors and vendors.
The right approach can help you pay your bills on time. By developing a system and sticking to it, you can make paying your bills on time easier. It may seem like a lot of effort, but it’s worth it to help maintain good credit scores, which can help you qualify for favorable rates if you borrow in the future.
Worried about paying your bills because of COVID-19?
If you’re experiencing economic hardship because of COVID-19 and you’re not sure if you can pay your bills, it might be helpful to look into relief measures from the federal, state or local government that could help tide you over right now. The CARES Act also expanded certain federal aid programs.