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Best Ways to Prevent an Overdue Account
What’s so bad about an overdue account?
There’s not one person alive that likes to see a $25 late fee assessed to their account. This not only starts a bad record with your bank but it’s extra money out of your pocket that you have to pay because you may have been a day late (or in some cases only hours late) on a payment. What’s worse than a late fee or being in bad standing with your credit card company? Hurting your credit! Credit scores and making sure you have a good score is something extremely important to every person who lives in the US. Without good credit, you get higher interest rates on credit cards, home, car and personal loans. It is really hard to get anywhere without a good credit score. If you think about it, it seems pretty easy enough to make sure you make a payment before a certain due date every month, right? Then why are so many accounts overdue every month? To be honest, there are actually lots of reasons this could happen, some of which are not something we can actually control. Most, however, can be avoided with simple, harmless steps.
Checking the charges are yours.
Getting a red statement in the mail is never a good thing to see and may even give you a mini heart attack when you had no idea anything was even owed on your card. First thing to do is, check the charges. Make sure that all charges on the account are yours. This will help you make that there wasn't any type of fraud on the account. You may have had a 0 balance on your credit card, for instance, and if something were to happen where your account was hacked, you may be overdue by not paying what someone else used on your card. This is something that can happen to anyone, no matter how careful you are in keeping your account secure. Luckily, most credit cards have 0 fraud liability and you can just call you credit card company right away so they can start an investigation. The overdue fee will be removed and so will anything else that may have negatively affected you. It may take a while but at least it's getting resolved. Just make sure you keep your card in a safe place and try not to use it online on untrusted sites.
Getting fired from a job unexpectedly.
This can also happen to anyone. You get fired without notice and may have little money saved to pay rent and buy groceries. At this point, would you rather pay your credit card bill with only $50 to use or pay your rent so you have a place to sleep? If this were to happen to you, you may get behind on your payments. First thing to do in this situation is contact the bank or credit card company as soon as possible to see if they can help. Lots of companies have Early Assistance programs that make sure you won’t get a late fee assessed for a few months until you are able to get a job again. They may also be able avoid you being reported late to the credit bureaus. You have to make sure you avoid waiting to long to call about this the date of your due date because they most likely won't have enough notice to avoid that specific late fee. It may also depend on how long you have been with the company, meaning if you just opened the account, you may not be eligible.
You may also have the option to protect yourself beforehand by paying a type of insurance everything month, if this program is offered by that company. This insurance can cover sometimes up to 6 months of payments in case you were to ever have a situation where you can’t make a payment. It can cost be as little as 0.50 cents a month but may be more depending on your balance at the end of the month. All the money paid for this insurance can sometimes be given back to you, if requested, at the end of the year. If you were to be let go while on this program, all the money you paid in insurance up to that point will pay at least the minimum payment of every month to make sure you are on time. You may have automatically been set up for this insurance when opening your credit card account and not know about it. You can look at your statement to verify or call you credit card company to get more information if you’d like to enroll.
Due date not working for you?
We all have rent/mortgage or other necessary bills to pay with different due dates. Having the same due date for everything on one specific date can be inconvenient especially if we get paid every 2 weeks or twice a month. Can't have everything due on 1 day because it could leave you without any money for groceries or other necessities unless you have a savings account you can use until your next check to “put back”. Although, we all know this usually is never the case. If your due date doesn’t work for you, you can always call your credit card company (or wherever the place may be that you owe money) and ask to have a change in due date. It may not take effect immediately but at least it will prevent other months going over due.
Remembering your due date.
Again, we all have many things going on and it is easy to forget small things like making a payment to your account. If your due date is good for you and you have money to make your payment every month and the ONLY issue is forgetting WHEN to pay it, then there are lots of ways to make sure you never forget to pay your bill on time.
Setting your account on Autopay: Many companies, if not all, have a type of automatic payment system that allows a payment to be withdrawn from a checking account on your due date every month. All you have to do is set it once and you never have to schedule another payment again for that account. It’s literally that easy. You can also decide to cancel it at any time for any reason. The benefits are obvious and it’s one less thing to remember. You are in control by having the option to decide what amount you want to have applied every month. The best choice, if you can’t make your payments in full every month, is to select to have at least you minimum payment withdrawn so you’re always on time. If you decide you want to lower your balance even more, you just make payments whenever you remember or have the funds to do so. Everyone wins!
Setting up alerts: You can set up alerts 2 types of ways. You can do it on your phone by setting up a reminder every month at a specific hour to make a payment to your account. This can be set either on the day it’s due or a couple days before, the decision is completely yours to make. The other way to set up alerts is you can have the actual company you are going to make the payment to set up an alert for you. They can set up alerts to let you know a week before your payment is due and also on the actual due date if you haven't made the payment by then. Setting up alerts is great but sometimes can defeat its purpose if you get the alert and swipe to dismiss and still forget to make the payment because you were busy at that time you received it. You also have to be careful when deciding to pay on the exact due date because there may be a cut-off hour. You may pay at 5PM when you get out of work, but the payment was suppose to have been posted by 3PM. You will still get a fee for being 2 hours late. That is not fun. Autopay may still be the best option if you don’t mind automatic payments.
Keep up the good work.
I can’t stress enough the fact that we are all humans and, as humans, we aren’t perfect. There are many ways to help us to prevent our account from becoming overdue, we just need to be open to different suggestions and options. Writing reminders on a physical calendar at home or work can look pretty but it’s easy to forget to look at. Because there are so many consequences to being overdue on an account, it's important for us to do our best to try any of these tricks explained on this article. You may even have your own tricks that work for you like wearing a sticky note on your forehead the entire day until you had the chance to make your payment. Whatever keeps you in good standing. If you haven’t had any issues with this in the past, that’s great news! Just remember it still can happen to anyone and it’s good to know what can be done to prevent this from happening in the future.