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Here's How Post Office Delays Can Affect Us Financially -- Beyond Late Bills

By Selena Maranjian – Aug 30, 2020 at 6:55AM

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Slow mail delivery can wreak havoc with much of your financial life. Take steps to prevent that.

Our venerable U.S. Post Office has become a topic of great interest and great passion recently, as the Trump administration has ushered in new management of it, with major Republican donor Louis Dejoy named as postmaster general. Under Dejoy's leadership, some big changes have been happening, with policies and procedures changed and scores of big and costly mail sorting machines being removed across the country, resulting in mail piling up undelivered and mail deliveries slowed.

Critics are voicing alarm that people will not only be getting birthday cards and magazines delivered late, but also time-sensitive bills and medications. Those are clearly major concerns. There are other concerns, too, though -- ones that affect investors and anyone with a financial life (which is most of us).

Person wearing blue and red vest carrying envelopes in front of a house.

Image source: Getty Images.

Here are some of the ways that the postal slowdown can hurt us financially.

Lower credit scores

Bills arriving late can mean that you end up paying them after they are due. That can be annoying and frustrating, especially if you pride yourself on prompt attention to financial matters. But there's another result of paying bills late: It can whack your credit score. Your credit score is calculated based on five key factors:

Factor

Weight

Payment history

35%

Amounts owed

30%

Length of credit history

15%

New credit

10%

Credit mix

10%

Note that the biggest component is your payment history. If you suddenly start paying bills late, your credit score can take a meaningful hit -- and that can cost you thousands of dollars, if not tens of thousands of dollars, when you want to borrow money, such as to buy a car or home. That's because those with the highest credit scores get offered the best interest rates when they borrow money.

Smaller capital gains or -- gasp -- bigger losses

This problem won't affect too many investors these days, but it can be a big (and costly) headache for those who are affected. It's common nowadays for us investors to hold our shares of stock in "street name." That means that when you buy shares of stock from your brokerage, while they are yours, they're listed in the record books as belonging to your brokerage. This makes it quick and easy to sell (and buy) stock. If you want to sell, you can do so just by clicking a few links and hitting a few buttons online. Or you can call the brokerage and place your sell order. Easy.

However, if you hold your shares in your own name, as investors used to do, it's a different matter. In this case, you probably have physical paper certificates that show the shares you own -- and to sell those shares, you'll have to mail that certificate back, signed, to your brokerage. That can take a little while even in the best circumstances, but with a widespread mail slowdown, it can take much longer. If you're selling because you think the shares will tank after an upcoming earnings report, you might end up selling them after they do tank. See the problem?

Information delays

Meanwhile, many of us investors enjoy (or simply prefer) receiving and perusing our brokerage statements and annual reports from companies in paper format. If they arrive late, though, that can delay some actions we might take based on them. If, for example, a statement shows that your stake in Buzzy's Broccoli Beer (ticker: BRRRP) has swelled to 30% of your portfolio, you might reasonably want to pare that position down by selling some shares, to get back to your desired mix and/or asset allocation.

Being late to sell those shares, though, leaves you too concentrated for longer, and may result in your getting a lower price when you sell, if the shares have been dropping in value. Similarly, you might read about some developments in Buzzy's annual report that have you losing confidence in the company. Again, it's best to sell sooner rather than later in such a situation.

Payment delays

Many of us mail in checks when we fund our brokerage accounts. If you're one of those investors, a delay in your checks arriving at your brokerage can delay your ability to invest in any given stock quickly. Similarly, tax payments heading to the IRS or to your state or town tax office need to arrive on time, as you might otherwise end up facing late-payment penalties.

If you're a landlord or have a business that receives checks in the mail, late-arriving checks can wreak havoc with your cash flows, causing cascading problems. Retirees receiving Social Security benefits by mail can be hurt, too.

Delays fixing errors

Credit card statements also often arrive in the mail, and you should be examining them each month. Ideally, you don't want to be too late to spot any erroneous or suspicious charges if you're going to address them with your credit card company.

What to do

So what can you do about these possibly costly headaches? Several things:

  • Consider doing more of your financial management online. For example, you can opt to receive communications and mailings from your banks and brokerages and credit card companies online. You can pay many bills online, too, and even brokerage accounts can be funded online. (If you feel more secure with paper records, you might print out the documents you receive by email.) If you receive Social Security checks by mail, set up direct deposits to your bank accounts. 
  • Consider contacting your representatives in Washington, to tell them that you want to get your mail in as timely a manner as possible -- as you were doing just a few months ago. Ask them to support restoring and supporting the U.S. Postal Service.

The mail slowdown has the ability to mess up much of your financial life to some degree. Pay attention to what mail is arriving on time, late, or not at all, and take steps to get hurt as little as possible.

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