Beautifying Your Financial Picture

How To Avoid Paying Late Charges And Overdraft Fees

by Darryl Nguyen

Perhaps one of the most frustrating things about getting behind on bills is the need to pay late charges and, often, overdraft fees. If you are only one day late on paying a credit card, for example, the company might assess a late charge that is greater than the minimum payment! If that check bounces, your bank will likely institute an overdraft fee. Take a look at some ways to nip the cycle in the bud and avoid paying late charges and overdraft fees.

Keep Close Track of Your Debit Card

While you might not think much about swiping your debit card for a $3 coffee purchase or a $1 candy bar, these small purchases add up. If you have a zero balance on your account, each and every purchase, no matter how small, can add on an overdraft fee. At a median cost of $34, paying for three small items could end up costing you an additional $100. If you tend to lose track of what you're using your debit card for, try taking out a certain amount of cash each week and using that instead of swiping the card on a more frequent basis.

Take Out a Short-Term Loan

Payday loans through a place like Payday Express can help you in a pinch; if you have a bill due that you can't pay on the day it's due, a payday loan can allow you to pay the bill on time and avoid a late fee. Be sure to read the terms of the loan carefully. In most cases, you will need to pay it back in its entirety to avoid paying late fees on the loan itself. If you are expecting your paycheck within a week or two, a payday loan can effectively tide you over and end up saving you money on late fees and overdraft charges.

Call the Bank

If you have been a customer of your bank for some time and have not had an issue with overdrafts or non-sufficient funds in the past, they might be willing to waive a fee or two. Simply call and ask to speak to the manager of your local branch. Explain your circumstances and ask whether there is anything they can do about the fee. reports that 44% of people they asked said they've talked their bank into waiving a fee. This strategy won't cost you anything, and the worst that can happen is that the manager of the bank will say no, so it's always worth a try.

Pay Certain Accounts First

Not all debtors will impose a late fee, and knowing which creditors charge how much can work to your benefit. Read through the fine print of your credit cards and other loans to find out what the fee is for each type of credit. For example, many credit card companies charge a fee as soon as the payment is one day late, while a car payment might have a ten-day grace period before a fee is imposed. Your doctor's or dentist's office might not charge a late fee at all unless you are over 30 days late in paying the bill. While the goal should be to pay your bills on time, if it's impossible, pay the accounts that will assess prompt late fees first.

If you are having trouble paying your bills, a loan might help you get out of a tricky spot. If that's not an option, try calling your creditors to explain your situation; sometimes they will work with customers who are struggling. Try to avoid getting into the cycle of having late charges and overdraft fees pile up, as this can cost you a lot of money over time.