Facing a Bill You Can’t Afford? Credit Cards Aren’t Your Only Option

Credit Card Facing a Bill You Cant Afford?  Credit Cards Arent Your Only OptionIt happens to the best of us.  No matter how carefully you utilize your monthly budgeting software with your money, if you’re on a tight income, you’ll likely have at least one time where you can’t afford to pay a bill in full.  Perhaps it’s an unexpected doctor’s bill or a car insurance payment that came after you already depleted your meager funds.

You may feel you have no choice but to pull out your credit card and pay for the purchase.  The problem is, if you don’t have interest free credit cards available to you and you can’t pay it off in full next month, you’re going to start incurring interest payments.  If you put $500 on your credit card at a reasonable 9.99% interest, and it takes you 5 months to pay it off, you’ll pay approximately $15 in interest. You could try to find some 0% balance transfer options, but again, if you’re credit score isn’t exactly ready for primetime, you’re going to be stuck with the fees.

But wait…. there’s a better way.

Ask if the company has an installment plan.

I was recently faced with a $405 doctor’s bill, and I did not have the cash to pay it in full.  Yes, I could put it on my credit card, but I didn’t want to because we’re trying to get out of debt.  What’s the point of incurring more debt?

I hesitantly asked the billing department if they had a payment plan, and they quickly said yes.  In less than 2 minutes, I had filled out the simple paperwork.  I had to pay $135 a month for the next 3 months.  No interest charged.  Can’t beat that.

The next few months are going to be particularly tight for us thanks to a large number of expenses coming due in July and August.  I just got my car insurance bill in the mail and noticed that they offer the option of making two equal payments, 60 days apart for a service fee of $2.  Yes, please.

I usually pay our car insurance bill in full, but taking advantage of the split payment gives us some breathing room during our high expense months.

Now that I’m aware of this option, I’m seeing it everywhere.  We’re enrolling our child in a new private school, and I noticed that the school offers the payments to be spread out over 5 months with a nominal administrative fee.

Many of us are conditioned to just pull out our credit cards to pay for both regular and unexpected payments.  However, if you prefer not to use credit cards or you’re digging your way out of debt, keep in mind that many bills can be paid in installments for a nominal fee, making it much easier to handle larger expenses.

 

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