Comments on: Which Motivates You? Financial Incentives or Financial Penalties?

By: Monique Attinger

Monique Attinger — Mon, 19 Feb 2007 12:32:45 +0000

Late fees do keep me paying on time. If there weren’t late fees, I’m a notorious procrastinator and my bills would likely wait months for payment. However, I’d LOVE to see someone offer me an incentive to pay early! I’d be just as motivated and I’d see some rewards for “playing nice”. However, I have to agree with Michael: I’m not holding my breath to see incentives any time soon.

By: Michael Chantrel

Michael Chantrel — Mon, 19 Feb 2007 12:23:17 +0000

I hate to say it: I think that companies make too much money from late fees to ever consider an “incentive” program to pay early! The cost-benefit of the incentive program would never match the amount of cash they rake in by penalizing. I suspect it’s only organizations that don’t want to have or build an extensive debt-oriented department (like a municipality such as Brisbane) that would go this way, in my opinion. Any company that already invests a lot of money in recovering debt is more likely to make use of this existing workforce by focusing on penalizing over incenting.

By: Martin Lindsey

Martin Lindsey — Sat, 17 Feb 2007 23:04:31 +0000

Interesting concept. Here’s a way to (A) Avoid fees from a tradional bank and simply be more disciplined or (B) Take advantage of the early payment rewards mentioned by Himanshu. Just sign up for your bank’s online banking web site and keep up with your balances each day. Read the article I wrote today in my blog http://martyblogs.blogspot.com/ and set it up today so you can avoid the pain of one system or enjoy the rewards of the other.

When you get there, how about favoriting me with the technorati button on the left? Thanks.

By: Himanshu

Himanshu — Sat, 17 Feb 2007 14:15:18 +0000

Well, nice thought. But you don’t have to guess anymore. I am in Brisbane, and my local council does offer a discount if I pay the council rates on or before the due date.

And guess what, just like avoiding late fees, I try to take full advantage of it, and get pissed off if I miss the deadline by any chance.

By: Golbguru

Golbguru — Sat, 17 Feb 2007 05:51:23 +0000

Please forgive the grammar in the earlier comment, my brain is working slower than my hands.

By: Golbguru

Golbguru — Sat, 17 Feb 2007 05:49:26 +0000

Money smart life: First, thanks for the mention. I am glad you picked up on this.

Your thoughts about getting incentives for early payments is very *noble* (I am not being sarcastic here), and our corporations are just the antithesis of that. I am pretty sure such a system would reduce at least some percentage of late payments (for the few among us who are motivated by rewards more than punishments), but it will also mean financial loss to the Capitalism Inc…so they are going to try hard to fight such a system. But like you said…it will be very interesting to see what happens if this really gets implemented.

Btw, I don’t *love* late fees…but sometimes it feels better to be a devil’s advocate and counter-argue..refines the subject under discussion.