Finances FYI Presented by JPMorgan Chase
Your financial health is built with good budgeting, patience, and a fair amount of luck. What many people miss, however, is the role that timing can play.
Making purchases during the wrong season or forgetting to check a late fee policy can impact your financial trajectory more than you might imagine.Take advantage of these insider tips to time your financial decisions for maximum impact.
Understanding Late Fees and Credit Reporting
One of the biggest mistakes people make is assuming that all bills have the same policies regarding late payments and reports to credit bureaus.
In fact, almost every expense category has varied terms and regulations.
You can improve your financial standing by understanding late fee cycles and credit report impacts from several major categories. With this information in mind, you can choose which bills to prioritize if cash flow is tight.
Mortgage and Rent
Most mortgage and rent payments are due by the first of the month. Mortgage lenders typically offer a 15-day grace period before they begin charging late fees, while many rental agreements usually offer only 5 days.
However, late mortgage payments are reflected on your credit report, while late rent payments are not.
Utilities
Utility companies generally have lenient late fee policies and do not report late payments to credit bureaus — unless you become several months behind.
Subscription Services
Check your terms and conditions, but subscription services almost never charge late fees, and late payments do not impact your credit report. If you need to skip a bill, these services might just pause your access until you catch up.
Bonus tip: Cancel auto-renewals on all your annual subscriptions. You’ll save money by critically considering the benefits of renewal each year, and you might be eligible for a deal if you threaten to cancel.
Avoiding Interest Payments
One of the best ways to maximize your finances is to avoid paying interest.
Paying by credit card is so convenient, especially with online purchases. But if you’re going to do it, it’s critical to understand the timing of your credit card payments so you can avoid interest charges and keep your credit report in excellent standing.
Paying Your Balance in Full
The best way to avoid paying any interest is to pay your balance in full each month. Many people put all household expenses on a credit card to accrue vacation points or rewards, but end up spending more in the long run thanks to interest charges.
Set up an automatic payment to make sure you don’t miss the due date.
Pay Three Days Early
Want to take advantage of timing even more? Set your credit card to pay the full statement balance three days before the due date. This strategy shows the credit bureaus a lower amount of credit utilization. Better credit will get you better rates on future loans and purchases.
Maximizing Purchase Windows
The costs of travel, vehicles, and other large expenses often ebb and flow throughout the year. Knowing when to pull the trigger on these big purchases can save you hundreds of dollars.
Travel Timing
The general advice is to book airfare about six weeks in advance for the best price, and that’s usually true.
However, for international travel or plans that aren’t flexible, booking earlier is wise. In these cases, you can use an online tracking tool like this one to see price predictions and make an informed decision.
Cruise pricing also fluctuates, but you’ll usually get the best price if you purchase a package deal as soon as the route is announced. Sites like this one can help you track any changes before you’re locked in.
New Vehicles
Car dealerships are most likely to offer a good deal when they’re making room for new inventory. Because most new models appear on the lot around Labor Day, August, September, and October are usually the best months to buy last year’s options.
Household Appliances
Getting a good deal on appliances is about the unit’s seasonality.
New air conditioner units will be least expensive in early fall or late winter, when cooling demand is lower and technicians aren’t booked for emergency heating appointments. Purchase a new refrigerator in the middle of winter and a stove in summer.
With a little bit of advance planning and attention to detail, you can improve your financial position through timing alone.
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.
