Out of all the things I did to regain as much as my paycheck as possible, likely the biggest benefit was putting my finances on auto-pilot. I had been late on almost every credit card payment, and when I added up those $10-50 fees for being late the past 3 years, it amounted to enough money to pay off all my current credit card debt right now; thousands of dollars worth. Basically, if I had simply made payments on time, I would be out of debt right now. As it stands right now, I’m still a year away from that. All due to laziness.
This is the simplest of all shortcuts, because it’s somewhat obvious. However, I didn’t consider it until I started to get my life in order, and it may be something others are overlooking as well. Basically, you start using automatic bill payments to simplify your life. Car payment? Automatically debited. Credit card payments? I have it setup to where all I have to do is click a button once per month. Insurance? Deducted automatically.
If you, like me, have problems accruing late fees, I would urge you to add them up and see how much money you’ve lost due to procrastination. It will shock you into setting up automatic payments. Online Billpay is easy to set up, whether through your bank or through the companies themselves. However, I would recommend you never give your actual account information to a 3rd-party company, and set up all your payments through your bank instead. When a credit card company has your information, it’s more difficult to protest false charges since you won’t notice them in time, and the payment is already made. Use your own discretion with who gets your information.
Once set up, it only takes a few mouse clicks once per month to get everything sent off. No more late fees, and you will find that you have extra money to add to the debt snowball you’re hopefully building. We live in an automated world, and small things like these can save lots of time and effort writing checks, at little time investment.
Additionally, I should mention that because of my procrastination, some of my %APR rates had skyrocketed to the 30% range. By agreeing to use their automatic payment service to ensure no more late payments would be made, two of my credit cards were able to offer me rate reductions to around 22%, a major decrease that will help me get out of debt much sooner. I win in two ways: no more late fees, and lower interest paid in general. And two of my other accounts say that after 6 months of on-time payments, I will be eligible for rate reductions with them too. Either way, for the amount of effort invested into putting your payments under an automatic payment system, the benefit is outstanding.