Life Hack: How to Avoid Late Fees on Your Credit Card and Save Money

Credit card late payment fees suck. They suck out $25 to $35 from your wallet every time you forget to mail in the payment. Here's how to avoid the fees. Also, if you're in debt, this will help you get out of debt and start saving!

Ask For Forgiveness

One time I hit one of these fees, and my payment got in one day later, I called up the CC company, and asked if they could remove the fee. That worked, and they removed it.

Pay When the Bill Comes In

After getting hit with a couple of these late payment fees, I started to pay the bill the day it came in. If I couldn't afford the full balance, I'd pay what I could. That way, I avoided the fees.

Pay the CC Bill Online

Eventually, I figured out the best solution. First, you need to set up your credit card account so it can get payments from your bank account. Then, you set up online access accounts for your bank and your credit card. Save the sites as bookmarks.

You also need to set up your work to pay you with Direct Deposit. (If you're a contractor, or get paid cash, you have to deposit your check immediately.)

Then, every two weeks, go look at your bank balance. The best time is shortly after your paycheck is deposited. At that time, go to your credit card's website, and pay off as much as you can.

Do this twice a month, at each paycheck. You'll never get a late fee again. Even better, your cash in the bank account will more accurately reflect how much money you really have, because you're drawing it down all the time. You won't overspend as much. Your credit rating will also improve, because paying bills before they are due raises your score!

Get Out of Debt, and Start Saving

I opened up an IRA account at the bank years ago, and, when I started to may the CC payments online, I also started to put money into the IRA. It was super-simple, because you can transfer from checking to the IRA.

I'd put in $150 to start. It wasn't "nothing" but it was a bearable amount. Within half a year, I had nearly $3,000 saved up, and getting to the $5,000 limit wasn't too hard.

Even if you're in debt, try to put away something into an IRA, just so you have the IRA account visible when you're taking care of your finances online. Transfer $20 into that account every once in a while, just to get the hang of it. It's fun!

A shorter, simpler version of this is at How to Avoid Credit Card Late Fees