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May 6, 2007

Why it's best not to pay your bills via automatic deduction

Floating_world_1_2

By doing so you lose the advantage of the float — at precisely 12:00:01 a.m. on the day the bill is due, that amount — whether it be for your mortgage payment, TypePad hosting fee, New York Times online subscription, whathaveyou — is deducted from your account.

Also, oftimes there is a grace period after the due date when it comes to mortgages, such that if the payment is received within 15 days after the due date, it's counted as paid in full without any late fee penalty.

So that money's remained in your account gathering interest while you dally.

In a similar vein, if you can manage to pay your credit card bill in full each month, putting everything possible on your card instead of writing a check gives you a nice long delay in terms of when you have to pay up.

Let's say it's the beginning of your credit card billing cycle and you're at the store and buy $100 worth of groceries.

Write a check and it's on its way to the bank that night with payment from your account made in a day or two.

Put it on your credit card and you won't even see the bill for a month, after which you'll have another two weeks to pay it.

That's a six-week grace period.

What's not to like about that?

May 6, 2007 at 12:01 PM | Permalink


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Comments

Wow! I can't say XXXX, XXXXXXXX, XXXX, or XXXXXXXXX XXXXXXXXXX or it is listed at XXXXXXX XXXX.

Makes it hard to talk about a subject like this if you can't say anything related to it!!!

Typepad is truly horrible software when it comes to XXXX.

Posted by: clifyt | May 6, 2007 2:14:29 PM

Ok...deleting half my comments to see why this software thinks it is comment XXXX...I'll keep deleting parts of the message until it is either meaningless or it is accepted.

Posted by: clifyt | May 6, 2007 2:12:42 PM

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