Keep your Bills Current

If you have a credit card, you may have noticed that from time to time you receive a tiny booklet delineating either rising interest rates or changes to the terms of payment. It's important to read this information carefully, as you may find that if you do not pay off your bills on time you may incur more than just a late fee.

For example, here's a typical example credit card policy: "The APR is 8.99%. Your APR may be higher. We will set your initial APR between 8.99% and 24.99% based on creditworthiness. We reserve the right to change your APR, fees, or other credit terms at our discretion. Additionally, if you fail to pay any minimum-amount payment by the payment due date, we may increase your APR up to a default APR of 27.99%."

This particular creditor is not unlike others that you may have applied with. It's therefore important when applying for a credit card to ascertain the annual percentage rate, monthly fees and default APR that may be incurred if you make late payments or skip a payment. Not paying your bills on time can make an already complicated situation worse, especially if you're living from paycheck to paycheck. Moreover, not only will you incur the highest APR for the use of that card, but it will also be reflected on your credit report, thus lowering your FICO score.

The key to successfully paying bills when they're due is to establish and stick to a budget. In this way, you can list and track all household expenses and debts and pay them accordingly every month. If you're paid on a bi-monthly basis, set aside money for bills out of each check. This makes it easier than having one check just for bills and the other just for spending.

But there's also another alternative that can assist you in paying your bills on time. You can sign up with creditors to pay via the Internet. You can also opt for electronic billing to replace receiving the paper bills in the mail. With this method, you can access your statement at any time online, and by receiving notification emails of when payment is due, you're less likely to misplace or forget about them. You're free to decide to either pay your bill on the day you receive the email, or you can click on the calendar normally provided and schedule another payment date. It's a perfectly safe method of paying your bills. All you need to do is to provide your checking account information, and once payment has been made, it's usually posted to your account on the same or next business day. Generally, you'll receive an email stating that the payment has been posted.

Paying off bills on time affects your FICO score in a positive manner and decreases the possibility that additional late fees and higher APRs will be imposed. Additionally, by using electronic payment methods, keeping your bills current invariably becomes much easier and more convenient.