The rising
cost of postage, the convenience and the time savings one can anticipate are a
few of the reasons to use online bill pay to pay your credit card bill. This is
however only the tip of the iceberg when it comes to deciding whether or not to
pay your credit card bills online. Here are some other reasons why it is
a good idea:
Late fees
When reviewing
the late fees that credit card companies charge on delinquent payments, many
cardholders are shocked. Using online bill pay to pay credit card bills
may help alleviate these late charges. It is important to understand that late
fees are added to balances due and could mean that it takes longer to pay off credit
card balances, and that interest is added to late fees when they remain unpaid.
Interest
rate changes
Generally
speaking, credit card companies are notorious for burying interest rate changes
due to late payments in their user agreements. Those who pay their credit card
bills using online bill payment may find that because they are paying their
bills regularly, before the grace period for late payments expire, they will
not be faced with an ever-increasing interest rate charge. Higher interest
rates mean that it can take longer to pay off credit card balances.
Credit
rating benefits
Those who have
set up online bill payments generally are able to pay their credit card
balances off without problems. This can only have a positive effect on credit
ratings. The more consistent a person is with paying bills on time, the more
likely they are to reap the benefits with a stronger credit rating.
Cost saving
benefits
There is
little doubt that postage costs have been on the increase. Online bill payment
allows a credit card holder to pay bills without the added expense of postage
(and envelopes). Certainly the cost of mailing a bill payment is less
than one dollar, but even this small amount of savings adds up over a
year. In addition to the cost of mailing, printed checks also cost money,
using online bill payments can also reduce (or nearly eliminate) this cost as
well.
Time saving
While most
people have envelopes and stamps on hand, they do run out from time to time.
This means a trip to the post office or stationary store to replenish these
materials. In our busy society, nearly anything that allows a consumer to
save time is very beneficial, even if it is less than one hour.
These are a
few of the reasons to use online bill pay to pay your credit card bill.
Another benefit is that most people who use online bill payments are aware that
they must keep sufficient funds in their bank account to cover these automated
payments. This can result in a heightened awareness of their balances and help
them avoid unneeded spending.