How to Avoid Late Fees on Bills and Credit Cards

The surest way to avoid late fees is to pay each bill a few days before it’s due. The Consumer Financial Protection Bureau (CFPB) suggests marking a pay-by date 7 days before the due date if you pay by mail and 2 days before if you pay online. Add three habits and most late fees become avoidable: line your due dates up with your paychecks, use autopay with enough money behind it, and when a fee does land, call and ask for it to be waived.

Here is each step, plus the federal credit card rules that work in your favor.

1. Know every due date

You can’t pay on time if you don’t know when a bill is due. Make one list of every bill with its amount and due date, including the ones due every few months or once a year. Then put them on a calendar. Our guide to keeping track of bills walks through it, using the CFPB’s own bill calendar tool.

2. Pay a few days early

A bill paid on the due date can still be late if the payment takes time to arrive. The CFPB’s bill calendar builds in a buffer:

• Paying by mail: pay 7 days before the due date.
• Paying online: pay 2 days before the due date.

Put the pay-by date on your calendar as well as the due date.

3. Line due dates up with your paychecks

If a bill is due a few days before payday, it’s easy to end up paying late. The CFPB’s advice: if you find you’re often late with a particular bill, negotiate a new due date that lines up better with the dates you receive income or benefits.

Ask the company whether you can change your due date, how to request it and when the change takes effect. Keep paying on the old date until the new one starts.

4. Use autopay, carefully

With autopay, you authorize a company to take money from your account on a schedule, so you can’t forget to pay. Two cautions from the CFPB:

• Keep enough money in the account. If your balance is too low when the payment is taken, your bank and the company may both charge fees, and those can add up quickly.
• Watch the amounts. If the amount will differ from what you authorized, the company must tell you at least 10 days before the payment. Monitor your account to make sure the amount and timing are what you agreed to.

One option for credit cards: set autopay to cover at least the minimum payment as a safety net, and pay the rest by hand.

5. Set two reminders for every bill

One reminder a few days before the pay-by date gives you time to move money. A second on the due date lets you confirm the payment went through. Your phone’s calendar can do this, or a bill tracker app. Billo, for example, reminds you 3 days before each bill and again on the day.

6. Update payments when something changes

New bank account, new card, new address: each one can quietly break a payment. When something changes, go through your list and update every autopay and saved card the same day. A change nobody noticed is one of the easiest ways to end up paying late.

Credit card rules that protect you

Federal rules under Regulation Z give credit card holders some useful protections:

• Same due date every month. The due date on your statement has to be the same day of the month for each billing cycle.
• Time to pay. Card issuers must have procedures to make sure statements are mailed or delivered at least 21 days before the payment due date.
• A 5 p.m. cut-off at the earliest. An issuer’s cut-off time for payments can be no earlier than 5 p.m. on the due date.
• When mail isn’t accepted on the due date. If a creditor doesn’t receive or accept payments by mail on the due date, it generally can’t treat a mailed payment received the next business day as late.
• The fee is on your statement. Your periodic statement must show the amount of any late payment fee, and any higher interest rate, that a late payment can trigger.

Don’t lose your grace period

A grace period is the time between the end of a billing cycle and the date your payment is due. Card companies aren’t required to offer one, but the CFPB says most cards do for purchases. If you don’t pay your balance in full by the due date, you can lose it and be charged interest on the unpaid amount, and on new purchases from the day you make them.

If you’re charged a late fee

Call the company. The CFPB notes that if you’re in good standing, creditors may be willing to forgive the occasional fee. Be polite, explain what happened, and ask.

Timing matters too. According to the CFPB, utility and credit card payments received within 30 days of their due dates typically don’t affect your credit report. After 60 days, your credit card company may raise the interest rate on your balance. If you’re going to be late, paying as soon as you can limits the damage.

If you can’t pay at all

If late fees are piling up because there isn’t enough money for every bill, the order you pay them in matters. Our guide on which bills to pay first follows the CFPB’s prioritizing tool.