Keep the lowest rates with your credit cards by avoiding late payments is a rule of thumb for anyone who has a credit card. Having a low interest rate can save you hundreds, maybe thousands, of dollars each year in interest on a single credit card. Multiply that by the number of credit cards you own and the saving can be significant.
Your first priority is to figure out why, the problem of late payments should be addressed. Many credit card companies charge a late payment fee to your account each time a monthly payment is late. That fee may not appear on your online account immediately. Instead, the company will add the charge at the end of the month and decrease your available credit line by the late fee amount. That results in you paying interest on money that you really have not spent. Another negative about paying late is the effect it has on your credit history. By reviewing the details of your credit report you will see that your payment history is kept on file for many months. Potential lenders will see the history of your late payments and hesitate to extend you credit in the future.
Determining the problem is one issue, but what are the solutions you can use without twisting yourself into a pretzel? Making a plan is the best way, but it must be a plan that you can live with.
First, look at the dates when you get paid or receive a monthly check. Prioritize your bills, paying the rent/mortgage first, then food, etc. If you are living paycheck to paycheck, find a payday where you will have enough money to pay all your credit card bills at the same time. The due date does not matter. If you pay the bills early, the problem of late payment is solved.
If there is no single payday that you can pay all your credit card bills, look to see if there are two paydays that combined will allow you to pay off your credit card bills. Use the first payday to pay off the closest due dates, the second payday to finish paying what is left. Remember, making the monthly payments early is not the Issue.
You can contact your credit card companies and arrange to change the due dates on your monthly bills and they are usually happy to make the change. Before you take this step, be sure to review your finances and be certain to take care of your essential living expenses.
If you are caught in a position where you will have to make a late payment, first call the credit card company and see if they will grant you a one-time exemption from the late payment fee. But do not wait until the last minute to do this. You are showing that you are financially responsible by taking this step, and it will be noted in their records.
Keeping our interest rates low by avoiding late payments is a matter of having the right approach and plan. The long-term benefits of a plan will show up in less money spent on fees and interest, and more money in your bank account.