Avoid late payment traps
By Azaraimy HH

One late payment on one of your bills from car loan to Kristal Astro subscription to life insurance could cost you higher rates and fees. Are companies justifying their action by punishing "disorganised" consumers or are they cashing in on consumers with whatever reason they can come up with?

"My car bill went up by $200 due to late payment handling fee, they called it. So I am paying the handling fee this month, next month there is still handling fee of $200 plus two months' unpaid bills. I can be paying handling fees all my life without paying a single cent for the car", said a man.

But why do late payments occur?

One reason, as a consumer put it, is "I need to pay other outstanding bills first".

It is not uncommon these days for a person's outstanding bills to reach uncontrollable stage as they can escalate with extra interests and handling fees.

Even though personal loan has helped the consumer market, and at times, to the extent of improving the standard of living, some believe the banking sector is too generous in approving loans and other finance related products to customers.

According to the government's outlook figure, banking sector had identified personal loans as the key driver with favourable offshore interest rates, which helped the retail and other commercial sectors, both directly and indirectly.

So, how does a person protect himself from becoming entangled in the web of debts?

Here are a few examples of how to manage personal finances without falling into the trap of "extra fees" charges for making late payments: Keep a list of all accounts, due dates, balances and credit limits; If an account's due date falls around the time of the month when cash is usually tight, call the issuer and have the due date changed; Get into the habit of paying bills as soon as they arrive and monitor all accounts carefully; And check credit report at least once a year and correct any errors.

\Courtesy of Borneo Bulletin