# Why won't some companies allow a payment before it's due or allow overpayment? **URL:** \ **Category:** Factual Questions\ **Created:** [February 27, 2010, 4:39pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651 "2010-02-27T16:39:43Z")\ **Posts on this page:** 11\ **Page:** 2
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [March 1, 2010, 6:26am UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/21 "2010-03-01T06:26:58Z")
> [@BigT](#): > > I don’t believe that at all. If so, getting late fees removed because the bank made a mistake would be much easier. They woudn’t run through the bills before they credit you with deposits, even if the deposit was made the day before. Or hold on to your bills, putting through the ones that make you overdrawn fastest so they can charge a late fee on each of the others.\* > > Banks are specifically set up to maximize late fees. > > \*Let’s say you have $50 in the bank. You make a $1 purchase, a $20, a $10 and a $35, before realizing that you didn’t have enough for that. The bank will not put them in in order, as that would only get them one late fee (for the $35). They will take the biggest ones out first, allowing them to charge you three late fees (for the $20, $10 and $1). I learned this the hard way. I’m getting the feeling we’re talking about two different things. I’m talking about payments made through your bank that they simply forward to the company that you have an account with (like paying your water bill online with your bank). The bank has no stake in your payment other than providing the service of forwarding the payment. I’m not talking about making payments for banking services or the bank processing transactions for purchases. ---
**Author:** ![Quintas](https://avatars.discourse-cdn.com/v4/letter/q/48db29/32.png) [@Quintas](https://boards.straightdope.com/u/Quintas)\ **Post date:** [March 1, 2010, 6:42am UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/22 "2010-03-01T06:42:59Z")
> [@Nava](#): > > Not in the US, but it’s the usual way in Europe. I fill in a document telling my debtor to charge me at bank account such-and-such-number (properly signed, of course, which nowadays can be done via e-signature) and they do. The bank knows how much to pay because the debtor is telling them; they know it’s ok to pay because they have my authorization on file (the debtor sends it with my first bill at the latest). > > Most people also get paid the same way, by e-transfer. Every time I move to the US I feel like I’m stepping back to the 50s, money-management-wise. This is getting off subject, but why do you feel this way? Everything you described is available and common in the U.S. Every job i’ve had since the mid-90’s has paid me via automatic deposit. Is that what you mean by e-transfer? As for your second point, automatic payments are available. I don’t like using it for utilities and such, on the off chance I get some wildly inaccurate bill and it’s deducted before I can sort it out. ---
**Author:** ![bengangmo](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@bengangmo](https://boards.straightdope.com/u/bengangmo)\ **Post date:** [March 1, 2010, 7:47am UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/23 "2010-03-01T07:47:16Z")
I’ve always enjoyed paying a little extra in recurring bills every month - the order of $5-$20 for utilities, phone and the like. Why? I know it doesn’t make financial sense, but I just like that as I build up a credit, if something goes wrong and I forget to pay, or worse, don’t have cash on any given month the bill is taken care of. Further, that 5 or 10 I am overpaying wouldn’t be put towards anything else - it would end up being spent on an overpriced and un-needed latte ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [March 1, 2010, 2:43pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/24 "2010-03-01T14:43:34Z")
> [@Markxxx](#): > > $20 doesn’t sound like much to you but if a thousand customers do this the company now has $20,000 on the books of unearned income which is a liability **that decreases the profitablity of the company** :smack:So says the person, who apparently know nothing about accounting. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [March 1, 2010, 4:49pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/25 "2010-03-01T16:49:12Z")
> [@bengangmo](#): > > I’ve always enjoyed paying a little extra in recurring bills every month - the order of $5-$20 for utilities, phone and the like. > > Why? > > I know it doesn’t make financial sense, but I just like that as I build up a credit, if something goes wrong and I forget to pay, or worse, don’t have cash on any given month the bill is taken care of. > > Further, that 5 or 10 I am overpaying wouldn’t be put towards anything else - it would end up being spent on an overpriced and un-needed latte I understand why you like to do that, but from a payment processor perspective, you’re messing up the system and making more work for people. You think leaving extra on your account is a good thing, but from the company’s perspective, their goal is all zero balances, all the time - that means everyone is current, with no late payments or overpayments. If you do this every month, you’ll probably always have extra in your account, and some companies have a policy of sending you a cheque for extra money on your account after a certain period of time, because if there’s one thing accounting departments like, it’s numbers that balance, and you are preventing that. A utility company is not your personal savings account - all they want is for you to pay what you owe, when you owe it. And write your numbers legibly and include your account number. 🙂 ---
**Author:** ![MitzeKatze](https://avatars.discourse-cdn.com/v4/letter/m/ad7895/32.png) [@MitzeKatze](https://boards.straightdope.com/u/MitzeKatze)\ **Post date:** [March 1, 2010, 5:13pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/26 "2010-03-01T17:13:20Z")
I don’t know exactly why companies do not allow it (although you have some very good answers already) but I do empathize and know a little bit of a way around it at least on a personal level. At one point I was very, very broke and unsure if I would have the money to pay the bills. While I realize most people go through that at least for a bit at some point in their lives, my screwed-up psyche took it to new levels and now that I do have the money for bills I am very, very anal about them. My goal is to never owe anyone anything, period. That means the day the bill drops is the day it gets paid, and for places that allow it I am paid up at least a month, sometimes two or three in advance. What I do for recurring bills that do not allow pre-payment is to simply set aside that amount of money, every month on the same day then set the calendar for the day the bill will drop (I am anal enough about it that I do know the exact date each of the utilities will bill) and make the online payment that day (it takes just a minute, so doesn’t need a block of time devoted to “paying bills” or anything like that). The bills that do allow pre-payment (rent for example) I pay ahead by two or three months. So at least in my own personal records I am ahead, and at any given time I have the entire monthly bills amount set aside (usually for two or three months) so if something catastrophic happens, at least those bills will be paid. ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [March 1, 2010, 5:25pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/27 "2010-03-01T17:25:33Z")
Heh. When I started using online banking, I went to the other extreme. When I mailed in bills, I used to just sit down once a month and write all the checks at once. With online banking, I find that I schedule the payment for delivery the business day before due date. Have to make that extra $0.00001 in interest on the money before parting with it … I don’t like automated payouts, but I do get electronic bills through the bank where possible. I also don’t use online for any bills that aren’t on the bank’s canned list, allowing you to enter the account number through a specific dialog. I don’t trust a random payee to have their accounting procedures together enough to credit me properly without the mail-in slip if they haven’t set something up with the bank. Most of my regular bills ARE on the list. This is just another illustration that medical billing needs to have something done about it - doctors, etc, are the notable exception. The guy who mows my lawn and leaves me a bill stuck in the door, I don’t expect to be able to handle this way. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [March 1, 2010, 5:27pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/28 "2010-03-01T17:27:59Z")
> [@Quintas](#): > > This is getting off subject, but why do you feel this way? Everything you described is available and common in the U.S. Every job i’ve had since the mid-90’s has paid me via automatic deposit. Is that what you mean by e-transfer? As for your second point, automatic payments are available. I don’t like using it for utilities and such, on the off chance I get some wildly inaccurate bill and it’s deducted before I can sort it out. Because for many people in the US, checks are still the “default” mode. The last time I worked there (2003), the company paid by direct deposit, although it was every two weeks (I’m used to monthly payments), and I had to pay several of my utilities by check. Since I spent 70% of the time traveling, this last detail was a PITA. ---
**Author:** ![MitzeKatze](https://avatars.discourse-cdn.com/v4/letter/m/ad7895/32.png) [@MitzeKatze](https://boards.straightdope.com/u/MitzeKatze)\ **Post date:** [March 1, 2010, 6:06pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/29 "2010-03-01T18:06:18Z")
> [@yabob](#): > > Heh. When I started using online banking, I went to the other extreme. When I mailed in bills, I used to just sit down once a month and write all the checks at once. With online banking, I find that I schedule the payment for delivery the business day before due date. Have to make that extra $0.00001 in interest on the money before parting with it … I don’t like automated payouts, but I do get electronic bills through the bank where possible. I also don’t use online for any bills that aren’t on the bank’s canned list, allowing you to enter the account number through a specific dialog. I don’t trust a random payee to have their accounting procedures together enough to credit me properly without the mail-in slip if they haven’t set something up with the bank. I am just the opposite. I don’t trust my bank’s online bill payment or recurring payments. I don’t know why, because I do trust the bank in general. So for online payments I will only deal with the bills that allow me to pay them directly through their site (electric company, cable, cell phone, etc.) and the only payments I allow the bank to handle are the ones to the bank (car loan, etc.). I also worry about scheduling payments for a later date even through their own sites, so the day the bill drops is the day that I log on and the day it is paid. I know that is just a quirk of mine, but the only bill I have that doesn’t have their own online payment is the rent, so that is the only one that gets paid by paper check, and it is not at all inconvenient to stop by the leasing office to drop it off when I am out walking the dog anyway. That is also one that allows pre-payment so I usually write them a check only every few months. ---
**Author:** ![Swallowed\_My\_Cellphone](https://avatars.discourse-cdn.com/v4/letter/s/9d8465/32.png) [@Swallowed\_My\_Cellphone](https://boards.straightdope.com/u/Swallowed_My_Cellphone)\ **Post date:** [March 1, 2010, 7:01pm UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/30 "2010-03-01T19:01:19Z")
> [@crazyjoe](#): > > I am not sure why you would want to overpay or pay in advance, I have done so when traveling, knowing that in the backcountry I wouldn’t be able to access any payment options. My phone bill and utilities were paid one full month in advance. My next bill reflected the credit. ---
**Author:** ![whatami](https://avatars.discourse-cdn.com/v4/letter/w/85f322/32.png) [@whatami](https://boards.straightdope.com/u/whatami)\ **Post date:** [March 2, 2010, 5:21am UTC](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651/31 "2010-03-02T05:21:01Z")
> [@Nava](#): > > Because for many people in the US, checks are still the “default” mode. The last time I worked there (2003), the company paid by direct deposit, although it was every two weeks (I’m used to monthly payments), and I had to pay several of my utilities by check. Since I spent 70% of the time traveling, this last detail was a PITA. Most (all?) banks that offer bill-pay have an option to send a paper check. So for me, my garbage and my water bill are both paid by paper check that is generated by my bank (actually my bank’s bill-pay business partner) and mailed to the address I specify with my account number noted on the check. This can be fun when paying out the yearly fantasy football winnings to friends. I always make sure to put something fun in the memo line. Generally something about sexual favors or something. [Previous page](https://boards.straightdope.com/t/why-wont-some-companies-allow-a-payment-before-its-due-or-allow-overpayment/530651.md?page=1)