Freedom from Fees: Repairing Your Credit While Saving Money

One of the simplest steps in credit repair is simply making a habit of paying your bills before the due date. However, this seemingly good habit can be costing you money in the form of additional fees and charges tacked on by the various companies whose bills you are paying. For example, many credit cards offer a ‘pay-by-phone’ option that is available in addition to other methods. What some may not realize is that these types of options, while assuring prompt credit to your bill, also carry a fee for their use. While $3.00 – $5.00 may not seem like much, over time, with several creditors each charging their own fee, you spend a substantial amount of money.

And it isn’t just pay-by-phone options that can cost you. Some utility companies charge fees when you use credit cards to pay, and if you cannot pay off the credit card in full each month, you are effectively paying interest on fees charged to pay a bill, not even the bill itself, which is a definite waste of money that could otherwise be used to help balance your budget, increase your savings, or even add to an investment.

So how best to avoid these types of fees when you’re trying to repair your credit and pay bills on time? The easiest way is the old way – write a check, be sure that you mail it in time for it to arrive well before the due date of the bill. However, for many people who are living paycheck to paycheck, this may not be an option at first. Another method that can work just as well is to set up automatic bill pay through your bank. Because many banks offer bill pay for free when you have a checking account with direct deposit, it can be simple to ensure that your bills are paid on time without having to pay additional ‘convenience fees’.

Another way to avoid fees when paying your bills is to enroll in automatic payment. If you know you won’t have the money available before the due date in order to mail a check, but will have the money available on the due date itself, you can oftentimes set up an automatic bank draft or charge to your credit card that does not incur additional fees. However, you should be careful with these types of arrangements if you are still trying to manage your budget – over the limit fees on your credit card or overdraft fees on your bank account can wreck havoc on your careful spending plans.

Regardless of which method you choose, it pays to be informed of exactly how you are managing your bill payments – repairing your credit shouldn’t cost you more than it has to, and with proper planning, you will be well prepared to take care of your bills in a manner that is both convenient and free. Always ask if there will be an extra charge when you pay over the phone, and be prepared to explore alternate payment methods that will let you meet your financial obligations without charging you extra to do so.