A credit card is a great way to build credit. By using a credit card regularly and making your payments on-time, you can work toward building a positive credit history each month. But the key to this credit building strategy is to avoid late payments at all costs. In fact, payment history is the single most important factor affecting your score. To help you on your way to building credit, here are four simple ways you can avoid making a late credit card payment.
1. Set Up Autopay
By authorizing your credit card issuer to process a payment every statement period, the responsibility of remembering to pay your bill is taken care of every month. Of course, you still need to make sure there are sufficient funds in the bank account to cover your payments. But automatic payments are a great way to avoid a late payment simply because they require no action from you at the time of payment.
2. Set Up Payment Reminders
When life gets busy, it’s easy to forget that your payment is due on a particular date. Unfortunately, even innocent mistakes like forgetting to make a payment on time can result in late fees and can get in the way of building good credit. To avoid these all-too-common scenarios, give yourself a reminder. Some credit card issuers offer ways to set up reminder alerts. But even if your bank doesn’t have an automatic reminder feature, you can set up payment reminders in your smart phone, computer, or planner.
3. Make More Frequent Payments
Another good way to avoid forgetting a payment is to get in the habit of making regularly scheduled weekly payments. Most credit card issuers require a monthly payment, but most also allow multiple payments. That means you can pay off a little bit of your credit card balance every week. Maybe you make a payment during a commercial break of your favorite weekly TV show, for example. When you get in the habit of making a payment every week, you can avoid late payments. Just make sure the total amount of your weekly payments adds up to at least as much as the minimum payment due for the statement period.
4. Pay Your Issuer Directly
Mailing a check to your credit card issuer takes time. It involves lots of other steps and requires relying on other people to deliver your payment. Likewise, setting up bill pay through a third-party payer, like a separate bank account, can lead to processing problems too. The best way to ensure that your payment gets processed on time is to pay the credit card issuer directly. You can do this online at the credit card issuer’s website, via their mobile banking app, or by telephone. But as long as you are making your payment directly to your issuer, you can be comfortable that it will be credited promptly.
One key to building credit with a credit card is to avoid late payments. And with these four strategies, you can make your payments on time and work toward building credit every pay period.