Here is a quick tip on better credit card management. It is especially for those of us who have experienced the “Oh s**t, I totally forgot about the credit card bill” syndrome. From my perspective, the main reason for this “I forgot” syndrome is having credit cards with due dates spread all over the month. Even if you remember a few dates, there is a very high probability that you mistakenly interchange the due dates for two cards and end up paying one of them early and the other late.
One elegant way out of this is to try and get all your statements at the same time every month - let’s call this the “due-day”. Once you do this, whenever you get any credit card bill, you know that it is due only on the due-day. An obvious advantage is that remembering one date is easier than remembering a dozen (duh!). The other advantage is that you will save a ton of time setting up payments every month. When you have just one due-day, you can set up a single “payment-day” on which you can pay all the cards at once. This helps whether you are still writing paper checks or using a financial management software like Yodlee. Also, since the due-day is a day of your choice, you can choose it in a way that ensures that there are sufficient funds in your checking account for all the payments. This will minimize the risk returned checks and over-limit or “non-sufficient fund” fees.
For example, the image alongside is a screenshot of a part of my financial calendar at Yodlee showing some of my bills due in December. Notice that most cards have due dates on or around the 15th. A couple of them are way off, but I am currently working on getting those dates changed too.
The easier ones to change are Citibank, Chase and Discover..you can do them online without the need to call anyone. For American Express, MBNA/Bank of America and Sears you will need to call them to see if they do it for you.
Some important points to remember:
-Citibank allows a change in due date only once every year. So choose your dates carefully.
-Discover will not allow you to change a due date to within plus/minus 5 days of your current due date. In other words, your choosen date has to more than 5 days away from the current due date.
-Usually, the change will take at least one statement period to take effect.
-Watch out for the statement that comes immediately after changing your due dates; there might be some abnormal date adjustment in this one.
Why did I write on this specifically?
Let’s think about it for a while. The minimum monthly payments are usually only about 2% of the balance on your card. If the average American owes $8000 on credit cards, then the corresponding minimum monthly payment to avoid late fees is just $160. With this kind of a minimum due, I have a feeling that most people who are late on credit card payments, are late because of poor management (”I forgot” syndrome) than the inability to pay the minimum required. Making just minimum payments is never enough..but at least it can save you from those late payment fees and from the disatrous effect that late payments can have on your credit score.
Some more related stuff that might interest you
In a couple of earlier posts, I talked about credit card management at length. These posts generated a lot of interest, criticism, and comments. I am listing them here for your reference:
-18 Credit Cards And Not A Single Late Payment: A Guide To Efficient Credit Card Management #1
-18 Credit Cards And Not A Single Late Payment: A Guide To Efficient Credit Card Management #2
While reading them, don’t get sidetracked by issues like “Why do I have so many credit cards”. The point of these articles is to suggest ways to manage your credit cards (or other debt accounts) efficiently. As for why I have so many credit cards..there are a dozen reasons like… I needed more credit, I was stupid at times, early cards I got were not so great, got rewards points on the new cards, made half a dozen 0% APR balance transfers and so on.
Since some people were worried about my credit score after these articles, I had to write this follow-up post:
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You know, I’ve been thinking about doing this for some time but never really did anything about it because I didn’t feel like figuring out the optimal time for all the bills to come. I sort of like the end of the month, though.
Oh yeah and I forgot to ask you: What do you do about those bills that you can’t pay online? I have a city utility bill that’s not online and the insurance carrier I have doesn’t do online billing that I can find either (Mercruy). I’d like to have all those bills on Yodlee so I can track them with everything else, do you know if Yodlee sends checks like some other sites will? And is there a manual input sort of option?
Excellent post. I was just thinking the other day that I wished I could have all of my credit card bills on the same day every month.
I had no idea that you could actually do it, I assumed it wasn’t possible.
I’m gonna go change my due dates right now. Thanks for the heads up!
Hey, I couldn’t figure out where to do this through the Citibank online. Do you remember how you found it?
Alex, Citibank says this if you search “Online Answers” with a query “Change bill due date”:
“We will be happy to review your account for a due date change. Please select Write to Customer Care below to send us your request.”
To do this, go to the “Help/Contact Us” tab in the upper right hand corner. From the drop-down menu select “Contact Us” –> then “Send a new message”.
What I did here was to put the subject as “Change bill due date” and sent a very short message like this: “Please change my bill due date to 15th of every month”. Usually they reply within a couple of days…to inform you that the change has been made.
BEWARE THE DUE DATE SHUFFLE!!!
The idea of having one due date for all credit cards is excellent. I have lived by that myself with very good luck for a couple years. As is mentioned in the article many companies will allow you to “set” the due date to whatever you like. But BEWARE!! Some companies (Chase as an example) will set a due date and then change it without any warning other than the indicated due date on a statement. So if you are like me and like everything to be automated, you can get scr*wed if you rely on the companies to keep their promises regarding due dates.
When I took out a very large credit line, Chase asked me what due date I would like and set it for me. I set my automated banking to pay my bill on the same day each month based on the date agreed upon (with about 5 days to spare–just in case). For several months there was no problem. After about 5 months I happened to check my statement and noticed a late fee on the account. It turns out that 2 months prior, Chase had changed the due date by about 10 days (earlier, of course) causing 2 of my payments to be late, fees to be assigned, and my rate to skyrocket. Oh yeah…the rationale for the due date change? “Your grace period changed from 25 days to 20 days, so your due date changed”. Huh?!?! How the heck does a “grace period” change necessitate the changing of a due date by 10 days after making an agreement with the customer for a specific date? That’s a crock.
When I called to resolve the matter, Chase graciously offered to return one of the fees but took no responsibility for the misrepretentations of the original “salesperson” regarding the fact that the due date would not change (which I had specifically asked about). They pulled out the old “well Sir, your contract says….”. Contract schmontract. I asked about returning the rate to what it was previously and they said I’d need to contact them next month after I receive my statement, at which time they would “see what promotional rates are available at that time”. Let me guess, my original rate of 3.99% on my 16,000 line will be no longer available (Oo…what a surprise) but they’ll be happy to offer me the low, low promotional rate of 8.99%. That’s terrible, decietful customer service. Thanks for nothing, Chase.
I heard a report on NPR that this is actually a strategy used by credit card companies to create this exact situation and extract more money from the customer. For shame.
If you change your bill due date with chase they send you a message stating the finance charges might be different the billing statement after due to the longer period. This makes me wonder….so do you get charged in finance fees for the change?
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