Pay Now, Argue Later
Sometimes things don't work out. It's frustrating when somebody asks you for money they didn't earn or that they're not entitled to. Should you pay them or stand firm? Some common examples of this dilemma are:
You bought a product that didn't work
There's an erroneous charge on your credit card
You feel swindled by a lender who got you a bad deal
Your health insurance company is supposed to pay for a treatment, but hasn't
You don't believe you owe the government taxes
Your ex-spouse is uncooperative so you shouldn't have to pay child support
Your ex-spouse racked up debt that you shouldn't have to pay
How Much Does Principle Cost?
Have you ever heard somebody say, “It's not about the money, it's about the principle?” This is typical in a case where somebody has the money to pay for something, but they refuse to pay because they're dissatisfied or upset about how things are working. Refusing to pay can be personally rewarding, and it can sometimes serve as leverage to get things done the right way. However, refusing to pay can also damage your credit.
When you have disputes with lenders, vendors, or service providers, beware of dragging your credit into it. The costs of fighting a battle can be huge. If you're committed to sticking to your guns, know what you're putting on the line.
A bittersweet truth about the credit world is that creditors have a lot of power over customers. If they report negative information about you, you can have major problems. You can miss out on job opportunities, you may have higher interest rates or be unable to get a loan, and you might not be able to renew or purchase insurance. Of course, this power is what makes the whole system work. The system gives borrowers a compelling reason to pay off debts as agreed. The message is, “If you don't pay, you're going to have trouble elsewhere.”
A Conservative Course of Action
If you want to be careful about your credit, consider paying any debts and settling the details later. By having the debt paid, you gain two advantages. First, nobody can ding up your credit by reporting you to the major credit-reporting companies. Second, you prove that it really is not about the money — it's about the principle.
When it comes to medical bills, make sure you know how your insurance company operates. Getting a claim covered can be more painful than surgery, and can take months or years. Find out exactly what they require to get your treatments paid. If you can pay the service provider and then work with the insurance company for reimbursement, you may get faster results. Instead of letting a bunch of uninterested parties handle the affair, you can stay on top of things and call for accountability.
If your debt has been turned over to a collection agency, you need to be very careful. In such a case, pay now and argue later may not be the best course of action. In fact, it could backfire. Pay now and argue later is a strategy to keep you out of collections and avoid damage to your credit reports.
