Ever thought about how much automating your bill and loan payments could save your time, money and credit score?
In today’s busy world, most of us are engulfed in payment of monthly bills: electricity, gas, phone, mobile, DTH recharge, Wi-Fi bill, insurance payment etc. keeping a track of all these payments and finding time for it can sometimes be a very difficult task. The main reason behind the difficulty in keeping a track of these payments is that these bills have different due dates so the odds of missing payment of one or more bill is high. Also other main reason for missing a bill payment due date that all of us have family and work commitments which causes slipping up on a payment.
But understand that late payments are very bad. They are real killers of your credit score. A late payment is surely going to incur a penalty for late payment of dues. In case of credit cards, late payment of dues will cost you to lose benefits and attract penalty interest rate. While the worst case scenario can cause a lower credit score. So automating your bill payments through credit card is a very attractive method to tackle the devil of missed bill payment. Automating bill payment is an easy, effortless and free way to get payments done.
What is automatic payment?
Automatic bill payments is a system that is created to manage the payments that you can set up through a bank account, credit cards or by authorizing your creditors to access your account for withdrawals. All these methods have simplified the process of bill or loan payments. Bill or payments with a Credit card is one of the most popular methods automatic payment systems.
Why automate bill payments through credit card?
Apart from saving on time and effort following are few more reasons to use a credit card for automatic bill payment.
- Nowadays everyone has a credit card so automating bill payments has become quick and easy.
- A Credit card is a very useful tool that helps you in streamlining your finances. So automating your bill payments through credit card is a wise move while you are busy with family and work life.
- Almost all major credit card companies offer an option of setting up of automatic bill payment system, in which you simply have to sign up freely to use the facility
- The biggest advantage of automating your bill payments through credit card is that it helps you in avoiding late payments thus saving you from getting hit by late fee and higher penalty interest rate.
- As the late payment of bills is averted so your credit rating or credit score remains undamaged
Thus above are the advantages of automating your payments through credit card. so now after looking into all the possibilities if you find automating bill payment is the way ahead for you then here are some tips that will help automated payment work for you.
- Read before allowing: Credit card companies have a certain control your account as while signing up for automatic payment system you give them rights to debit the amount from your account. So it is highly recommended that you read through the terms and conditions of this process rather than jumping straight into it. Reading the fine print of the terms and conditions will help you in avoiding glitches and surprises.
- Choose the payment date: while setting up a due date for automatic debit it is wise to take into account spending and income habits. Set the due date when you account finances is usually at its peak.
- Decide what to pay: It is recommended to review your past credit card bills to decide how much to pay. Credit card companies offer payment of automated system in three ways: pay minimum due, pay full balance or pay a fixed amount. So before deciding what to pay it is important to understand your payment habits. If you are in need of cash then opt for minimum pay or fixed amount payment method but if your card spending is not high then you can set the payment mode to pay the full balance.
- Set up alerts: It is wise to keep a close eye on your account so set reminders. These alerts will remind you when your payment of a particular bill is due and will let you know once it is done. Another way to keep a close eye on your account is by reviewing your account statement.
Thus it is good to utilize the convenience of technology to ease efforts and save time but be vigilant and take responsibility for all the transactions in your account.