Late Fees Cost More Than You Think

Alexandra Romanov By Alexandra Romanov, 28th Feb 2012 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Money>Debt

Late fees can wreak havoc on your personal finances as well as your credit rating

Late Fees Cost More Than You Think

Strangely enough, I don't actually handle the bills at my house. My husband who is retired does this. He seems to like being in control of something but he's a bit scattered sometimes. He isn't big on paying attention to such mundane things as due dates; feeling that one day more or less just doesn't matter. Boy was he wrong about that.

I tend to look over bills when they arrive so imagine my surprise when I noticed several late fees tacked onto the bills. My husband just shrugged when I mentioned it and took the bill away from me. That didn't work very well. Just because he pays the bills doesn't mean I don't care about what is going on. So I audited all of our bills.

I pulled all of the bills for the past year and with only one exception they had a late fee attached; even those that had technically been paid on time. Upon further investigation I learned that just because you pay a bill at the payment center doesn't mean it's credited to your account immediately. Sometimes it takes 3 business days.

Twenty years ago I lived in a small town in the Midwest. I would walk uptown and pay the bills in person. The electric company was next door to the gas company which was next door to the water company. A half block further down was the cable company. I mailed my insurance payment yearly. Now paying the bills in person isn't possible; most of the companies are no longer locally available.

Instead, we can mail the bill, take it to an authorized payment center or pay the bill online. If you pay at the payment center it can take 3 business days for the payment to be credited to your account, as I mentioned before. You also have to pay anywhere from $1-3 as a service fee. Online you have to pay $3-5 for what they call a convenience fee. Otherwise you get hit with the late charge. I have strong opinions of paying a fee to pay a bill. I'm oddly of the old fashioned opinion that paying the bill should be free.

The late fees when I added them up were over $200 a year. $5 here and $10 there added up pretty fast. Not only that, utility companies report to the credit bureaus so our credit was taking a hit as well though luckily not by much. We no longer pay those fees because I make sure everything is mailed in plenty of time to reach its destination. I can still hand deliver the water bill; it's the only local utility company left.


Budgets, Late Fees, Personal Finance

Meet the author

author avatar Alexandra Romanov
Alexandra Romanov is a writer in southern Illinois. Her articles appear online and in print media, including "Spirit Seeker" magazine and "USA Today."

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