How To Dodge Late Fees Without Ever Touching Your Paperwork

Photo: Flickr via syauqee

Filing paperwork is as fun as calculating your taxes, but blowing off this very adult task can lead to hundreds of dollars in late fees, interest charges and even identity theft.That’s why I developed a two-part system that requires me to get cozy with my file cabinet only twice a year. (More on that below.)

Think about it. If you miss one credit card bill, you’d owe as much as $39 in late fees, plus God knows how much interest.

If repeated each month, the late fee alone adds up to $468 a year!

Consider the other late fees and interest charges you are on the hook for: your car payment, your mortgage or rent, insurance, library books, cell phone, taxes, utility bills and so on.

Aside from fees, paying late can damage your credit score, which means lower quality loans (with higher interest rates) in your future. If you are behind, here’s how to get out of a late fee. Generally, the longer your bill is overdue, the greater impact it has on your score.

If you’re in the job market, employers routinely check your credit report before making a hire, though a new law in California somewhat restricts access. Other states may follow suit.

A messy or non-existent system for tracking your paperwork could lead to identity theft, especially if you haphazardly toss sensitive personal information in the trash or recycling. You never know you may be snooping through your papers.

Here’s how I avoid late fees and barely touch my paperwork.

1. I set up auto pay online for as many bills as I can.

2. I receive e-statements for as many accounts as possible.

3. At least once a week I open all my mail, recycling as much as safely possible. Anything with my full name or address goes directly into a massive “to be shredded” box. Bank statements, health records and bills slide into my “to file” folder.

4. When I can’t cram another thing into my “to file” folder, I procrastinate for another month until I really can’t shove another thing in there.

5. I divide my “to file” papers into piles on my bed or floor. One pile for credit card statements, another for health records, yet another for bank statements until everything is grouped appropriately. Then I pick up a pile, open my file cabinet and shove it into the corresponding folder. Occasionally, I’ll start a new folder in my file cabinet.

6. I request my free credit report once a year. Did you know that only 4% of consumers take advantage of a law that gives you free access to your credit report? This way I can check up to make sure I haven’t accidentally leaked my info or been taken advantage of.

Voila! In less than an hour, all my important papers are tucked away. How do you deal with paperwork?

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