These simple steps ensure my payment is always on time.
Missing a credit card payment can have catastrophic consequences. Your credit score could be damaged. And in addition to late fees, you could end up with a penalty APR that makes your debt payoff more expensive.
In the past, I've accidentally missed a credit card payment because my husband and I each thought the other had made the payment. We were fortunately able to mitigate the damage. We were historically good customers, so our card company didn't impose the fees we'd normally have had to pay.
But we don't want to make a habit of missed payments because our card company would quickly stop working with us. The good news is, I've found a surefire way to make sure that doesn't happen again. Here are the three steps I take.
1. Living on a budget
The first and most crucial step to making all my credit card payments on time is making sure that I have the money to pay the bill when it comes due.
As a result, I live on a budget. I make sure to limit my spending to an amount I can comfortably cover with my income. And I don't charge more on my card than I budgeted for.
Because I make sure my balance always stays below the amount I can afford to pay, I'm confident I will be able to not just pay my card when it comes due, but pay it off entirely so I don't owe any interest.
For help creating a budget, read our complete guide to budgeting methods.
2. Setting up automatic payments
Knowing that I have enough in my bank account to pay off my credit card balance enabled me to take another important step to ensure that I don't ever miss a payment. That step involves setting up automatic payments.
Every month, several days before my credit card's due date, the money to pay off the card in full is automatically withdrawn from my checking account.
I know I have enough in my account to do that because I've stuck to my budget. That way, I can be confident that the payment will be made without me having to remember to make it-- and I don't have to worry about overdrafting my checking account when the funds are automatically withdrawn.
For help sticking with a budget, one of the best budgeting apps could be the answer.
3. Signing up for text alerts
Although I trust the technology behind the automation of my payment, I also put an additional safeguard in place: I signed up for text alerts. That way, when my payment is processed and my balance is paid in full, I receive an alert.
This extra step allows me to make sure I don't accidentally end up missing payment because of a technical snafu or because something went wrong, such as a change to my bank or credit card account info. If I don't receive that text saying that my balance is paid in full, I can go into my bank and credit card accounts, identify the problem, and make the payment on time.
These three simple steps work to ensure that no careless mistakes or overspending cause me to miss paying off my card. Since I'm not late with my payments and my balance is always paid off in full, I get all the benefits of credit cards. This includes rewards and purchase protection, as well as the chance to build credit without worrying that a missed payment could derail my efforts.
For more information to help you stay on top of your finances, check out our personal finance resources.
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