The True Cost Of Convenience Fees
A new trend in bill payment today is using means other than the traditional way of writing a check and mailing it in to make a payment. These other payment methods, including making a payment by phone and paying the bill online, are designed to process the payment faster and provide confirmation that the payment has been accepted in a few seconds. Although these methods may seem like a benefit because of the time saved, many lenders charge for using these methods, which can cost the consumer a large amount of money over time.
What Triggers The Fees?
The fees that are charged for using these additional methods of paying a bill can vary from lender to lender and often depend on the way that the transaction is being made. For instance, some companies may not charge for making a payment online because there is no customer service representative involved but will charge a fee for making a payment on the phone if the person must talk to a live individual. Other companies will charge a convenience fee for making a payment in any way other than traditional check writing for the convenience of knowing that your payment was received, processed, and applied to the account the same day that the payment was made.
How Much Will The Fees Cost?
The amount charged by the lender may not seem like a large amount when viewed as a single transaction, but the amount adds up quickly when the entire picture is viewed. For example, a convenience charge of $10 per transaction adds up to $120 per year if the same payment method is used every month. If the person is paying convenience charges for three of their accounts each month, the total is $360 paid in convenience fees each year. Multiply this by the thousands of consumers that use these payment methods and it can easily be seen how lenders and banking institutions are raking in millions of dollars each year from these charges.
How To Avoid The Charges
One of the most common reasons that a person choose to pay the convenience fees for making a payment using one of these alternate methods is because the payment will not arrive on time if paid using the traditional method of sending in a check. When these bills arrive in the mail, it would be better to pay them immediately if the money is available in the bank instead of waiting until closer to the due date to make the payment. This will ensure that all payments are made well before the due date and that all accounts will remain current.
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