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It’s never fun opening up a credit card statement and seeing those scary words:

Late credit card payment fee = $100,000,000

Okay, it’s not that much – but sometimes it sure feels like it.

Especially since these are credit card fees that could have been avoided, and no one likes paying for things they don’t have to. Anyone can miss a payment, but it’s definitely an expensive credit card mistake you don’t want to be paying every month.

You may find yourself promising to be better next time, making a reminder of the day in your notes app, and carrying on with the next month…

Until it happens again.

But no fear, we’re here to share how to avoid late payment fees and never miss a credit card payment again.

What happens if I miss a credit card payment?

There’s a cost to being late, so it pays to be organized.

But if you do happen to be on the receiving end of a late fee – here are the consequences.

Late payment fees

You’ll be charged a late fee, which can be upwards of $40, depending on your policy.

If it’s your first time, your credit card issuer may forgive the fee and let you off with a warning. There’s also often a grace period after you first open your card.

Most of the time, though, you’ll be charged a late fee each month your payment is late or is less than the minimum payment.

Related: Waive goodbye to those credit card fees – the Canadian way!

Higher interest charges

There are also interest charges…

If the payment is 60 days past due, your bank will probably increase your interest rate to the penalty rate – which is as high as they can charge, depending on your card.

Loss of promotional rates and rewards

Sometimes they’ll add other penalties, like removing a promotional interest rate or even taking away rewards completely.

This makes it more expensive to carry your card, since you may be relying on rewards to make up for the annual fee or the promotional rate to save on interest.

Your credit score drops

Another hit you’ll take with a late credit card payment is to your credit score. That’s because your payment history is a huge part of what makes up your credit score.

A bad credit score can make it harder for you to take out a new credit card, finance a car, or get a mortgage for a house.

Related: Credit Score In Canada: What These 3 Digits Say About You

5 tips to avoid late credit card payments

Everyone has their own way and routines for paying their bills.

Some work better for others, whether they’re old-school pen and paper, or new-school digital reminders.

We’ve asked around and compiled some tips to make sure you stay organized and never miss a payment again.

1. Add due dates on your calendar

Every smartphone comes with a calendar app that can perform basic functions like reminder notifications. If you’re hyper-organized like me, you even use a different calendar app than the one that comes with your phone.

I use the Google Calendar app available in the App Store or Google Play Store and set recurring events for every bill that needs to be paid.

This way, I have them all in one place, and my phone will buzz with a notification the day before I need to pay it.

Make sure to set the notification for a time when you’re usually not busy, or else you’re likely to just ignore the reminder. It may be worth setting multiple reminders per month (every second Thursday, for example) just to be extra sure.

2. Set up automatic payments

Automating your finances is one of the best ways to make sure everything is done on time. Life can get busy, but automatic payments never fall behind.

You can often set up your credit card bill to be paid automatically through your online banking. Every card issuer has a different process for this, so if you’re having trouble, it’s best to call customer service and have them walk you through it.

This means your money will be automatically withdrawn from your debit account, so make sure you have enough money in the account to cover the cost of your credit card bill, or you may be hit with a dishonoured payment fee.

3. Consider bill reminder apps for your smartphone

If you want to take the next step and download an app that’s specifically for bills, there are lots of great apps that can help you organize your payment schedule.

Want an example? TimelyBills is a free personal finance management app that helps you:

  • see all your bills in one place,
  • manage your budget,
  • track your spending habits, and
  • consolidate a monthly/yearly spending report.

It has thousands of positive reviews, tons of positive testimonials, and a really clean, user-friendly interface that can streamline your finances – and of course, avoid those late payment fees.

Apps like these really help you become the personal finance boss everyone needs to be in order to take control of their cash.

4. Schedule a day to pay all of your bills at once

Many people have a special day in their calendar that’s dedicated to their bills. It’s something my mom did, my grandmother, and probably a few generations before her.

Lots of people pull out all of their statements (or pull them up as e-statements on the computer), make a list of what needs to be paid, and send off cheques physically or electronically.

There’s a reason generations have done it – because it works. Getting into a routine like this really helps, and takes the pressure off of paying bills on separate days every month.

For example, you could make the 1st of every month “bill day,” or maybe the first Saturday. Just be sure the day you choose works for you so you’re not likely to skip out if it becomes inconvenient later.

5. Pay off your bill as soon as the charge is posted

What I see more and more people doing is using their credit card for gas, groceries, and other things they need to buy anyways to get rewards, and paying it off immediately.

This is a good way to maximize your credit card rewards and avoid late payment fees.

Our favourite credit cards

We couldn’t help but remind you to choose a credit card that actually works for you.

By knowing what your biggest expenses are and choosing a credit card that offers rewards on purchases you actually make every day, you’re getting so much back in return, while showing credit card companies who’s boss.

It’s not always the best idea to choose a low fee or no fee credit card, since sometimes annual fees can be worth the extra rewards you’re getting in the end.

Here are our favourite picks:

There’s no wonder why the is ranked our best credit card in Canada.

With a $120 annual fee that’s charged out monthly as $10, this card can definitely work for you. It earns:

  • 5x the points on eligible eats and drinks,
  • 2x the points on gas purchases, and
  • 1 point for everything else.

You can also earn up to 30,000 rewards points as a welcome bonus in the first year when you spend $500 every month.

The is a major player in the cash back credit card game. This card will earn you:

  • 4% cash back on recurring bills and grocery purchases,
  • 2% cash back on gas and daily transit, and
  • 1% cash back on all other purchases.

Its $120 annual fee is also waived for the first year, which means you can really test this card out and see if it’s for you.

Another honourable mention is the . If you’re looking for a customizable cash back credit card, look no further.

You can choose up to 3 categories to earn 4% cash back on for the first 3 months you have the card. After that, it’s a standard 2% cash back on your bonus categories.

With categories like recurring bills, groceries, and more to choose from…this can be a stellar card for anyone.

We want to hear from you

Every been hit with a late payment fee that made you want to scream?

Do you have a routine for paying your bills?

Let us know in the comments below.