Personal Finance Advice

Most lenders give borrowers the option to pay monthly bills over the phone. Some lenders require you to speak to a customer service representative while others have an automated system that allows you to make a payment over the phone without having to go through an actual person. The amount you authorize is debited from your checking account, and this amount usually equals the amount of your payment plus any fee added by the lender.

It’s a convenient way to make a payment, especially if the payment is due that day or is already late. In fact, sometimes when a customer service representative calls about a late payment, the rep will offer to take the payment right then over the phone. While it can be an easy method to make a payment, you need to realize that sometimes lenders charge a high fee for the service. How high? Imagine making a $10 minimum payment, but paying $25 to do so over the phone. It hardly makes sense, unless you’re doing so to avoid an even costlier late fee.

What some customer service representatives don’t reveal to the customers they speak to over the phone is that usually the website for the lender will include a feature for a same-day payment that oftentimes cost much less than making the payment over the phone. Why does it cost less? If a lender can entice customers to utilize an automated system instead of dealing with a live customer service agent, it saves the lender money.

Make sure you are registered online with lenders so if you find yourself needing to make a payment on the same day you can use the online feature instead of making the payment over the phone and experiencing some hefty fees. You’ll want to register ahead of time because usually a lender’s website requires that checking accounts get verified before payments can be extracted from the account, and verification can take a few days. Verification might involve the lender making a small deposit of a few cents and then having you verify the amount deposited before the account is considered valid for payments. If you need to make a payment in a rush to avoid late fees, an unverified checking account is going to slow you down considerably.

Making a payment over the phone should not be a regular practice unless you’re dealing with lenders who do not charge for this type of transaction. Always ask how much the payment will cost you, and if you’re dealing with a live customer service representative you can ask about waiving the fee. You never know when you might find yourself dealing with someone who just so happens to enjoy waiving fees for polite customers.