From mortgages to car payments to phone bills, most of us probably have more monthly bills than we’d prefer.Because many creditors share your payment information with the three major consumer credit reference agencies — Equifax, Experian and TransUnion — falling behind on your bills could negatively affect your credit score. Making late payments could also lead to late fees and losing a promotional rate APR on credit cards. Read on for some tips that can help you make your payments on time.
1. Make a list of every bill
It’s tough to pay all of your bills on time if you don’t know all of your obligations — so identifying all your creditors, vendors and service providers can be a good place to start.
If you have a lot of bills to pay, some can fall through the cracks. To help avoid this, check your free credit report on Credit Karma and list every lender (leave out accounts that are paid off). Don’t forget that not every lender will report to all three of the main credit reference agencies, so it’s always good to cross-reference this information by getting your free statutory credit report from each of the big three.
Next, review recent bank and credit card statements to add any recurring obligations to your list. This could include gym memberships, phone bills, subscription services (like music or streaming apps) and utility bills.
Your list should include the lender or service provider, the minimum monthly payment and total balance due.
2. Find out when your payments are due
Once you’ve got a list of bills to pay, find out when each bill is due and add that to your list. If your due dates are all over the place, you may want to tweak them to make tracking payments easier.
Some creditors may allow you to pick or change the date you pay, so go online or call to find out.
While changes may take a few billing periods to go into effect, having the same due date for multiple bills can simplify your life.
3. Add your payments to a calendar
Tracking your bills’ due dates through a calendar or other system can come in handy.
For example, if you use an online calendar, you can add payments there. It’s usually easy to add recurring events, and your calendar app may have handy tools (like colour coding), so due dates stand out from other events.
Some budgeting apps will have a calendar to help you track due dates for your bills, and categorise your spending. Not all of these budgeting apps are free to use – so work out your needs and do your research on what’s out there.
4. Decide how much you want to pay
For some of your bills, you may have to pay a set amount. Others — including credit cards — may allow you to pay as much or as little as you want after making the minimum monthly payment.
Ideally, you’d pay the full balance due on all your bills every statement period, even on the credit cards and other accounts that allow you to carry a monthly balance.
This may not always be possible. But for accounts that allow you to carry a balance, you may decide to pay more than the minimum to help you save on interest, avoid building up unnecessary debt or potentially become debt-free faster.
If you’re going to pay an amount other than the minimum or full balance, note it on your list of bills to keep track of the situation.
What are minimum monthly payments?
A minimum monthly payment is the smallest amount of money due each month to keep your credit card account in good standing.
5. Set up automated payments whenever possible
Armed with your list and your calendar, it’s time to set up your payment system.
One approach is to pay as many bills as possible automatically. You can typically set up standing orders through your bank or Direct Debits through your creditors.
While you can set up automated payments from your bank account, you have another option for certain monthly obligations — charging your regular bills to a credit card.
But it’s best to use a credit card to pay your monthly bills only if you’re confident you can afford to pay the card on time and in full. Otherwise you may build up a balance that will charge you interest — and that could undermine your efforts to stay on top of your bills.
6. Sign up for reminders or download an app
Whether you autopay or handle bills manually, it’s helpful to be reminded when bills come due. You can remind yourself to make a payment or to check if an automatic payment cleared.
Your own calendar reminders may be enough. Another approach is to use a budgeting app for organising your money and reminding you about bills. You may also be able to sign up for alerts directly with creditors and vendors.
What’s next?
The right approach can help you pay your bills on time. By developing a system and sticking to it, you can make paying your bills on time easier. It may seem like a lot of effort, but it’s worth it to help maintain a good credit score, which can help you qualify for favourable rates if you borrow in the future.