Eight reasons why you need to pay your bills on time
It’s easy to let bill payments slip – after all there are so many things we need to think about. But it pays to keep on top of them. Here are eight reasons why.
Did you know that more than three million people in the UK failed to pay a key bill on time in 2017? Or that a late bill payment can stay on your credit score for six years?
A difficult as it can sometimes (or always!) be to make ends meet, there are several good reasons why it’s important to try to stay on top of your bills. Here are eight of them.
1) You’ll be less stressed
Probably the most important reason to stay up to date on your finances, is sleeping more easily. When you’re in control of your money, and aren’t dreading every call, email or letter, in case its a demand for an overdue payment, life is easier and less stressful. So, if for no other reason, give your nerves a break and pay on time.
2) You’ll have a good credit score
Virtually every action you take financially is reported to and recorded by credit reference agencies. Miss one bill payment deadline, and they’ll find out. Miss several and you could see your credit score plunging – making it harder to borrow money, and locking you out of many of the best and cheapest financial products.
3) You’ll save money
Many companies offer a financial incentive for paying your bills on time or upfront – this is known as an early payment discount. So if you’re making a new purchase or signing up with a new company, remember to ask if they offer one – and grab it.
4) You won’t get a visit from the bailiffs
One big reason to pay your bills on time is to avoid unwelcome visits from the bailiffs! Once you’re on their books, debt collection agencies will continue to contact you by phone, mail and in person (with increased charges added to your debt) until it’s resolved.
5) You’ll pay lower insurance premiums
If you have a bad credit history, thanks to late payments, you could find yourself paying higher insurance premiums. For example, if you want to pay your car insurance in monthly payments, these may well be increased, or you may even be asked to pay a deposit if you have a poor credit rating.
6) You’ll be able to budget better
When you pay your bills on time, you have a clear picture of what is coming into your account, and what regular expenses you have. So you can see when you need to cut back on your spending, and when you can afford to splurge.
7) You’ll avoid late fees
Keeping up with your payments will help you to avoid any late payment fees. If you don’t meet your payment deadlines, not only do you risk late payment penalties, but the interest begins to add up on your debt – making it increasingly more difficult to pay back.
8) You won’t slip too far behind
Once the interest starts piling up – and the letters on your doorstep – it can feel more and more impossible to catch up with your unpaid bills. And slowly, day by day, a seemingly unsurmountable mountain of debt can grow. Please don’t let yourself slip into this if you can avoid it.
By staying on top of your bills every month, you’ll also avoid slipping into the trap of debt. If things do get or feel out of hand, please do seek help. We recommend looking at Money Saving Expert’s advice on debt problems.
How can you avoid paying bills late?
It’s very easy to just recommend that you always bills on time. But we know that’s not always possible. Sometimes the money isn’t there to cover them. Or life just gets in the way and they slip your mind.
Here are some ways you can avoid late bill payments:
- Make sure you know when your payments are due, and keep a record.
- If you know you’ll struggle to pay on time, find out which companies have a grace period.
- Find out how long payments will take to process, and factor this time period in.
- Automate your payments wherever possible with direct debits or reminders.
- Arrange to pay your bills on pay day, when you know you’ll have the funds.
- Keep a buffer of funds in your budget to allow for unexpected or larger bills.
- And finally, don’t apply for credit you can’t easily afford.
Photo by Cheron James
