When you are a debt situation, the foremost thought in your mind is how to reduce your credit. This can be difficult to accomplish if most of what you owe is on your credit cards and you only have a limited income to support all your basic needs and debt payments. So to help alleviate your situation, you need to be wary of the fees that can help grow your debts.
One of the add-ons that you have the power to control and eliminate are late payment fees. If you think about it, the mere $35 (this is the current average) that banks usually impose on every late payment is not significant. However, you have to realize that the interest amount will be computed based on the sum of the late penalty and your previous balance. You know how high the interest can be and your late payments can make it worse. If you let your late payments go on, it can help grow your debts exponentially. By simply paying on time, you get to control your debt and stop it from growing unnecessarily.
But how do you keep yourself from being late? Here are some tips for you to follow.
Create a budget.
A budget is necessary to help you understand your income and your expenses. It allows you to identify your priority expenses like your debts and make sure that a part of your income goes there every month. It also allows you to see what expenses can be given up to ensure that your priorities are financed.
Set up an auto payment system.
Banks allow auto payments so you can set this up to ensure that every month’s contribution is funded. You don’t have to go to the bank to deposit your payment and it will be more convenient for you.
Pay via online banking.
Online banking is very convenient and it allows you to pay your bills regardless of banking hours. This way, you can pay your dues at night or even on weekends.
Ask for an extension.
Calling your creditor to ask for an extension is also a good way to keep the late payments from happening. Just don’t make a habit out of it because your creditors may not be lenient at all times and you can find yourself slapped with a late payment fee.
Get professional help.
If you can afford it, enrolling in a debt management program will help you keep up with payments and enjoy a lower monthly requirement. Through this program, debt counselors will take over payment management and all you have to do is to send a single payment to them. They can also help negotiate to waive any current charges and penalties. If you are lucky, they may even get approval for a lower interest rate for your debt.
Of course, late payments are only one part of the problem. You need to address your spending habits if you really want to solve your financial crisis. Think about the debt relief options that you have and start making smarter spending choices from now on.