Ensuring a Good Interest Rate with On-Time Payments

Posted by Madison on July 14, 2008

Who hasn’t drooled a little over the prospect of a 0% interest rate on a new credit card? A credit card may not be a sensible choice for everyone but for those who qualify, there are a lot of advantages to utilizing an introductory rate of 0%, especially those consumers looking to pay down other high interest credit cards. Transferring balances from a high interest card to a card with 0% interest is a common way people have found to pay off credit card debt faster.

Pay On-Time to Keep Your Current Terms

However, as with any credit card account, there is a large responsibility that comes along with a no or low interest rate. The most important being the perpetual on time payments each month to your credit card company.

Paying a credit card bill by the due date each month is part of the agreement you originally signed when opening an account. Failure to make good on timely payments essentially means you have broken that agreement by not living up to your end of the deal.

In return, the credit card companies are within their rights to raise your interest rate. Some companies can raise interest rates astronomically after just ONE missed payment. Because all of this information is usually contained in the fine print of a credit card application and agreement, many people are shocked to learn they agreed to such terms because they never bothered to read the tiny little writing that appears to be insignificant.

Best Practices for On-Time Payments

So, how can you always be assured that the credit card company receives and processes your payment on time? There are several ways you can simplify the process and make sure you are not subject to a higher interest rate simply because of mistake or a forgotten payment.

  1. Pay your bill when you receive a statement. Each month you should carefully analyze your bill for unauthorized purchases or other possible errors and then make a point to pay the bill immediately if you prefer to pay by mail.
  2. Pay your bill automatically. Many banks and some credit card companies will allow you to set up an automated monthly payment where monies due get directly taken from your selected bank account. You can often set reoccurring payments for the same day each month and it is recommended that you set auto-pays for at least 5 days prior to your bill’s due date.

    Remember too that it is also your responsibility to make sure payments were deducted as scheduled and that they have been received by your credit card company. Do not just assume it happens without incident each month. Also, always make sure you have enough money in your account to cover the automated bills each month, otherwise you can face substantial overdraft fees.

  3. Pay your bills online. Many folks do not yet feel entirely comfortable dealing with financial matters via the internet. However, through online accounting you can keep tabs on your statements in real-time and pay your bill with a few clicks of a keyboard, saving you a stamp, precious time, and a forest full of trees should you choose to go paperless.
  4. Use your calendar. Using an old-fashioned means of tracking still comes in handy. Make a habit of writing due dates on your calendar as well as reminder dates of when to mail out the payment. For the technologically inclined, schedule a reminder on your system that will pop up when you need to pay your bills.
  5. Contact the Company. If you find it particularly difficult to stick to a due date for some of your bills, contact the company and request a new due date, one you can more easily manage on time. Make sure you receive a copy of the new arrangement to prevent any complications.

Tisha Kulak is a writer for Creditorweb.com, where she writes about credit card offers, finances, credit cards, and responsible credit card use.

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