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Bill Paying frustrations


HAPe4me
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Ok, allow me to vent.............

For 4-5 years now, I have successfully concentrated on raising my credit scores, utilizing several techniques. One of the primary ones is to NEVER ever be late. I have been quite successful doing this by utilizing my bank's "Billpay" service. I know some are easier and more reliable than others, but mine has been VERY reliable. At times I go directly to the creditor's site to make a payment, but usually I sit down the first week of the month and schedule 30 days of bills to be paid at various times through-out the month. I schedule them at least a day before the due date. My bank guarantees receipt by the day I schedule it, and will not allow the date if they are not able to guarantee it. In 4 years they have not failed. I am glad not to rely on unknown postal time to send stamped envelopes.

so my issue is not with the bank but with the credit companies themselves.

1. It seems that many of the due dates of bills, especially credit card bills, falls on a weekend. EVERY MONTH! Are they TRYING to make people late? Billpay automatically advises me that the date is not a business day, and asks me to change the date. I suspect if I changed it to the next business day, a monday, would the creditor consider it late? Some do! If I were mailing the bills, I would have to allow for no weekend delivery at the companies. what is the scheme?

2. Since that one does not catch me, due to billpay's diligence, try THIS scheme. Several of my credit cards seem to change their mailing address what seems like every 3-5 months. It is a waste of my time to have to go in and edit the biller's information each month. so far this has not resulted in the mis-posting of any of my payments, probably because things are done electronically in most cases, but STILL, WHY do they change so often? Often it is just a different PO Box in the same town, but not always. what is their plan?

3. Since credit cards are now very clear that they can raise your interest rates if you are late making a payment to them OR ANY OTHER CREDITOR, I have suspicions that what they want to do is force people to end up being late by not keeping abreast of these date and address issues. The bills themselves keep changing their design a couple times a year also. Some of them seem hard to figure out what is the minimum due, the new charges, the finance charges etc. One could easily I think pay less than the minimum amount due, just by misreading the bill.

OK, vent over. Anyone work in the industry and know why these things are done? I just KNOW its Bush's fault, but other than that, what is the deal?

This thread could also be a discussion on credit issues, and ideas for raising your credit scores also. Feel free to jump in with anything along those lines, I will add thoughts in another post on those later if any discussion begins.

~HAP

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2. Since that one does not catch me, due to billpay's diligence, try THIS scheme. Several of my credit cards seem to change their mailing address what seems like every 3-5 months. ~HAP

One thing I would suggest is going from "several" to a few (maybe one or two) credit cards.

One for personnal and one for business (a third could be used for tax purposes such as medical expenses).

I pay my bills utility bills and mortage payments on line through my banks web site. Many companies will let you adjust you "due date" (to general time frames).

The below is easier said than done and might not be possible for some (depending on different circumstances).

1. My "primary" credit card is with the bank that my direct deposit goes to. From the bank web site I verify account balances, pay bills and transfer funds from one account to make payment on my credit card.

2. If you owe balances on credit cards, pay more than the min. amount due.

3. Pay off bills as quickly as possible.

4. If you get paid every two weeks, make a mortage payment every two pay periods (pay more the the min. if possible). eventually, you will have "payment due dates" a few months out. (This could be a good safety net).

5. If you are going to be "out of town" on payment due dates, double up on payents before hand. or estimate (high) and pay ahead of time.

6. My car payment is with a credit union, I have a payroll deduction go to my account there, and the credit union withdraws the loan payment every month.

7. don't spend more than you make... Unless it's an emergency, don't make purchases on credit that you can't pay off at the end of the month (two exceptions are house and car payments).

When you get your credit report/scores they provide information on how to raise your credit scores. (to get this report, usually costs about $50.00. And you do get what you pay for on these services) here is a good site: http://www.equifax.com/

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Good Z, thanks.

In my case, I have multiple credit cards for multiple purposes. Busines A, business B, personal, large purchase rewards, one for 0% balance transfers when needed......etc. I most usually pay off the balances, so this is not about me personally (except for the above rant). I do have my due dates set to spread through the month as I do not have a regular payperiod, being self employed as a remodeling contractor.

You are correct that for many people it is wisest to not have too many cards. Other people's needs and abilities of course may vary. I am not one however that recommends having NO card. Renting cars, or emergency vet bills or whatever, make it helpful to have some available source for quick funds.

You raise an excellent point about not paying minimum only of course. Depending on one's situation there are several plans that might help. the important thing being a PLAN. Perhaps start with paying twice the minimum, or paying at least the new charges and new finance charges. After successfully getting that habit under your belt, work on paying all new charges and say, 10% of the old debt.

If you are uncertain of what your available funds will be come due date, go ahead and schedule AT LEAST the minimum due, and then when payday comes, make an additional payment. Nothing says you can only make one payment a month.

One negative affecting a credit score can be the ratio of credit used to credit available. This can be a reason to have multiple cards also, if you carry a balance, to keep that ratio down. ONLY if you can trust yourself to behave and not use this additional "room" on your card. I understand it CAN be overdone, with too many cards or too much available credit that it is hard to keep track of or making you a risk to start usijng it.

I have heard it is not good to cancel a card. if you feel threatened by it, just cut it up so you cannot access it.

As Z-shot mentioned, it is a good idea, to keep an eye on your credit reports from the big three reporting agencies. In Colorado, we are able to get those once a year for free. I do not know about other states. I order one every 4 months from one of the companies at a time. This keeps me current and allows me to see what changes have taken place.

Anyone else with comments? I am by no means an expert, all I know is what has worked for me to get my score to where it is. I am sure someone here has some more expert advice, and can correct me if I said anything incorrectly.

~HAP

Edited by HAPe4me
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As Hap mentioned,

In today's economy, you need credit cards for a variety of good reasons.

One thing that I did on my cards is I called the credit card companies and asked them to keep my credit limit at an amount I choose instead of them raising my credit limit. Of course, if need be I can request to have my credit limited raised.

I would suggest that if anyone is having problems with finances, seek advice from a professional financial advisor. They can help you make a plan. The hard pard could be executing the plan. If you find yourself in heavy dept, it may take a while to get out from under it. And you might have to restrict yourself to purchases that are nessasary and cut out some "nice to have or do things.

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one thing about paying every 2 weeks...one time I tried sending half the payment in every 2 weeks, but I hadn't enrolled in their Countrywide program..I ended up being fowled up in my payment because they apply what they thought was extra to pricipal, but I was overdue on Int, Tax, Ins. I called, we straightened it out and all was fine, but if one chooses to pay every 2 weeks, one must enroll or do whatever the financing outfit wants them to do. or things can get sticky.

another thing, your credit score is higher is you carry under 80% of your Limit. My Credit Union Finance officer told me that.

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Thanks for that information Washington.

the idea of making half your payment every 2 weeks is that by the end of a year, you have actually made 13 monthly payments (26 payments made every 2 weeks) instead of 12 monthy payments. this cuts the number of years of your mortgage down, and saves sizable money overall.

I think the score is even higher if you keep even lower percentages.

I should point out, the reason to build up credit scores is because so much we do is based on it. Even if you do not intend to buy something on credit, your score affects your insurance rates and other financial matters.

~HAP

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Exactly right Hap and in addition to changing dates also wach out for times, Some close there business day at 2:00 so if you pay after that while still the due date they charge you a late fee. I just had one reversed this month for that reason. It is about late fees and interest rates.

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Another reason for having a good credit report is:

Some employers look at an applicants credit report when they hire for some positions. (I have very serious reservations about this practice. And, I heard of a company that is facing a law suit because of this practice.) Yes, employers can do this when you sign a form (giving them your permission) at the job interview or when you submit a job application. Of course, you have the option of not signing (then guess what happens to your application).

I think that it is a good idea to bring up topics like this. Some people might have little to no information or worse yet is bad information on credit, credit reports and debt.

Credit is a tool that can be used, and it can also be abused.

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to rent a home or an apartment her it is common to have them run your score .

I do not have a problem with it although I do see how some could be discriminated against. but maybe they should be.

I also use easy pay and the thing is if I make an additional payment in the month of ANY amount the easy payment will not go through and again they can get me with finanace fees and late charges!

I am in debt the average american is over 2000 in debt that is alot when you figure in how many do not even have any credit card, this is only credit card debt.

mine is over that now i was out of work for a yer and lived on my card, try not to do that!

i am determined to use credit only for emergencies i can not afford now like a car repair etc. I will not "go shopping" and pay later.

many family memebers have gone bankrupt my nephew is only 21 and just filed, i do not know it seems stupid to do that extremem measure but these days it is so common he even put his electric bill for the enitre year in the bankrupt notice.

i hate using cash it seems i never have enough with me.

I never thought it would be this much of a challenge to go to the bank get bills and pay for stuff, but im trying to do just that. previously i ONLY used my card for everything.

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what works for me is to opperate ONLY with cash

no debt here!

i had a credit once when i was young and got into trouble with it

after i bailed myself out i vowed never to have another

i pay the bills the first of the month when my pension check comes

and the rest is play money

wish i could play more!

but i do enough

Edited by coolchef
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I have managed to pull myself out of crushing debt, but it took years. I do a number of things that I feel really help. I treat myself with inexpensive things on a regular basis so I don't feel "deprived"- a magazine subscription for example. I bring my lunch most of the time. I think many times before making a nonessential purchase, realizing the urge will pass and that item will probably still be around in a year or so when I've paid down more of my debt. I went to school and got a much better job and then a second parttime job, fortunately I love them both. I fully understand this will not be feasible for everyone. We have our furnace on a timer so( no one is home during the day), the heat comes on 30 minutes before we come home, shuts off at 9 pm and goes on again from 5-7am while we are getting up.We use electric blankets and heated throws. These measures can and will save you probably 1500-2000 a year, well worth doing. I discovered the salvation army a few years ago where if you look you can usually find many new items each week, even business/dressy wear. I no longer go to regular stores except on very rare occasions.I used to shop every week, typically spending 200 dollars or more!!! I have actually found a garage that doesn't rip you off in repairs, this is surprisingly common. Ask around for a better garage if you suspect yours. I don't smoke anymore, a double blessing. I take pleasure and enjoyment from the outdoors and change of season. In short, I have attempted to maximize earnings, minimize the consumption lifestyle and now I am able to pay down my debt at least 1000 a month, sometimes more. I don't have alot of easy answers for those of you who have alot of kids or other situations beyond your control. Yes, you are being manipulated by these companies, they have you by the "family jewels" and only you can decide what steps to take to begin to solve the problem. Just rememberIt wasn't created overnight and won't be solved that way

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I used to work for Equifax processing mortgage applications in Nashville...

Some advice...

Take your credit card statements and figure out which one has the LOWEST interest rate. Call that company and ask if they're having any specials for balance transfers. If they are, then roll ALL of your cards into one account. THEN - ask when the payment due date will be - generally its the same day of the months or every 26 days or whatever. Ask for it to be placed at a time that's good for YOU.

Pay off your department store cards first and then GET rid of them. Those are the worst ones to use and generally have the highest interest rates.

If you suspect you're going to be out of work for any reason, call the credit card company BEFORE you are out of work and ask for any special insurance programs they might have. Find out how long you have to pay for them before they can be activated and what they cover. (I was able to not pay on three accounts for 12 weeks after the baby was born - it saved us over $1K during a time when I had only two-thirds or no income.)

Closing a card will NOT hurt your credit score - it will show up in history but will drop off your score in four to seven years.

You can be reported LATE by a company to the credit bureaus even when you are NOT 30-days late. You can dispute lates by submitting a letter to the company who thinks you're late and sending a copy to the credit bureaus. If you don't have a response by the company who has reported you as being late within 30 days (it might be 60 days - I'm not 100% sure about the time...) then that letter of dispute will be placed with your credit file and the bureau will have to erase these lates. This can raise your score.

You would be AMAZED at the number of companies now who report to credit bureaus - it's not just mortgage companies, auto finance, and credit cards - most utilities report. If you want to know if Ma Bell has tattled on you recently, then call the company to ask. You'll be amazed! Yep - you can get dinged for a late cable or cell phone bill!

Own a home? Check into getting a home equity line of credit and rolling your credit card bills into that. Set it up to be paid off in a few years - like 5 years. You can write off the interest (something you can't do with the credit card bills) and your home will appreciate in value, while the crapola you bought with the credit cards will not appreciate (most likely...) Then cut up the cards... This is especially good if you're buying a car - do it with your home equity because you can't write off interest paid out for car payments.

Watch those 6 months with 0% finance offers you see at places like Best Buy or Sears. The catch is that if you're not paid up IN FULL on the first day after the six months is over, then you get hit with a cumulative interest charge - in one lump. I figured this out when I put $1800 down for a computer and the works - the interest would have been another $250 - for just 6 months! OUCH! If you can't pay those mothers off, then ROLL 'em into another account that won't slap you.

You can get a payment to a company quicker if they accept payment via web portal vs. you paying through your bank. My experience is that paying thru the bank takes about 6 business days from when I set it up, but paying via the portal is one to two business days. You may get a fee for this - but sometimes the fee is cheaper than the late charges!

I take my bills and totally prepare them for mailing them out the same day they come in the door. Then I write the due date where the stamp goes. They are placed in the mail on the pay period before they're due - in other words, I pay them 2 weeks ahead of when they're due. This allows for processing time. IF something is really sensitive for processing, then I place tracking on it when I mail it - that way, the company can't say I mailed it late. (This saved my butt more than once with Soverign Bank on an auto loan - they tend to sit on payments - they slapped me late once. The next time, I PROVED they had my check for 10 days before they cashed it and credited my account!)

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I have a caution on rolling your debt into balance transfers. Make sure you have paid off the card completely before you transfer to it and then DO not use the card until the transfer is paid off or transfered to another card. Credit card companies apply all payments you make to the debt category you have with them that has the LOWEST interest rate.

For example:

You have $2000 of outstanding debits in "Purchases" which have a 15% interest rate.

You then transfer $5000 to that same card which offers 0% for the first 12 months.

All your payments for the next 12 months will go towards the transfer amount, and the original $2000 in charges keep accumulating at that 15% rate. (over $300/year, as the amount compounds each month).

Also watch out for what their fees are for balance transfers. Most are 3% of the transfer, but some have $75 or $90 max fees and some have no limit to the fee they charge. If there is no limit to the fee, that $5000 transfer will cost you $150 to process.

Try not to get cash advances with your credit card. They are the LAST category your payments get deducted from and usually have the HIGHEST interest rate, often 24%, not to mention the other fees they charge and the ATM charges also. Go to the grocery or bank and get cash directly.

If you are not sure you understand your monthly statement, call the company toll free and ask for explanations. LOOK at how much the TOTAL of all your finance charges are each month on each card. Some statements might have three or more categories where they have charged you interest, and the highest-interest category balance does not go down until you pay the whole card off.

I have seen emergency ATM cash advances go on for 5 years at 24% interest.

0% Balance transfers can be great things if used properly, and especially if you have the capability to pay them off when the 6, 9, or 12 month promotional period is over. You just have to stay on top of them, and if you are ever late even on some other bill, the promo rate often reverts to their standard rate.

Great comments, keep them coming. As I said, I am no expert, I just think many do not understand the importance of maintaining good credit, nor how to do it. With the wide range of experiences here at the Cafe, there are many who can help you understand things better.

~HAP

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