Your Money Credit
Making Sure Payments Get Credited On Time
happens all the time. You make a bill payment thinking it will arrive on time and find that your
statement includes a late payment fee.
With credit scores becoming the test for jobs,
mortgages and most other financial arrangements, having late payments counted against you is not
a good thing. Given the latest advances in electronic banking, most of us would expect our bill
payments to be processed immediately. However, you should be aware that this is not always the
Even if you pay your bill on the day it's
due, you may still have to pay a "late-payment" charge or another charge, depending
on how and when you pay your bill.
To begin with, always check your bill statement
carefully, since companies sometimes indicate that they need up to five days to process your payment.
That means that your payment must reach them at least five days before the due date. Otherwise,
they will consider your payment to be late, and may charge you accordingly. Make sure to get the
check in the mail or program your online bill with enough time to get the payment where it needs
to be with a day or two to spare.
Also, remember that - as a rule - if you make
a payment during extended banking hours (on weekends or generally after 3 PM on a week day), the
payment is usually considered to have been made on the next business day.
To help make sure you get credit for paying
your bills on time, here are some general guidelines on how much time it takes to process various
types of payments.
If you decide to pay your bill by mailing a check, you should allow four to five business
days (Monday to Friday, but not statutory holidays) for your bill payment to reach the biller.
The biller usually deposits your check on the date they receive it, and considers that you have
paid the bill on that date (unless it's a postdated check).
At a bank branch
If you pay your bill in cash or by check, the teller will stamp your payment stub (the tear-off
portion of your bill) with the date on which you made the payment. They usually consider that
your bill was paid on that date, provided that you paid the bill before around 3 PM and that you
didn't pay it on a weekend.
At an automated banking machine (ATM or
If your bill payment automatically appears
on the screen when you pay it at an automated banking machine, you are usually considered to have
made your payment on that day.
If you deposit your payment at an ATM and
you put the stub into an envelope, you may be considered to have made your payment on the next
business day or, in some cases, two business days later, because branch staff require that amount
of time to empty the deposits or bill payments and to verify the contents of the envelopes.
By telephone or on the Internet
If you make a payment during business hours (before around 3 PM), you are usually considered to
have made your bill payment on that day.
By pre-authorized debit
If you want to pay your bill by a pre-authorized debit, you must sign a pre-authorized debit agreement,
which authorizes the biller to take the funds directly from your bank account. Your bill payment
will then be made on the due date that is indicated on your statement, because the biller withdraws
the funds directly from your bank account on that day.
Make sure that there are funds in your account
to cover automatic withdrawals. Many banks charge overdraft fees if these payments cannot be funded.
You may also be charged a "bounced check" fee by the business who could not collect
Be aware of cut-off times and holidays!
No matter what your preferred method of payment,
you should be aware that if you make your payment close to a holiday or a weekend, you need to
allow extra time for the bill to be processed.
For detailed information on how bill payments
are processed, ask the biller how long it will take them to process your payment. Some companies
consider that a bill is paid on the date they receive the payment, but it can sometimes take up
to three days.
If you think you made a payment on time and
your statement reflects a late payment, contact the biller. If your credit is good, acting immediately
can often stop a late payment from being reported and may even get the late payment fee reversed.
About The Author...
For more information on this topic, and on other financial consumer issues, contact the Financial
Consumer Agency of Canada (FCAC) by calling the toll-free number 1-866-461-3222, or by visiting
FCAC's Web site at www.fcac.gc.ca.
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