Make bill paying slightly less dreadful: Automate
Between credit cards, cable or streaming services, gas, electricity, and beyond, you probably have a whole assortment of services to pay for each month. While I can’t make your bills disappear, I can give you one solid piece of bill paying advice: Automate your payments.
What is automatic bill payment?
It’s exactly what it sounds like. Basically, you’re allowing merchants (for example, your cell phone provider or your gym) to take bill payments out of your checking account or charge the amount to your credit card on a designated date. Once you’ve signed up for this, the money will simply vanish from your account on that date or appear on your credit card statement.
Why should I bother?
Two words: Save money. By auto-paying, you’re avoiding the chance that you’ll forget or be late on a bill. Paying on time not only protects your credit score, but helps you avoid late fees—which can reach $40 for a single overdue payment. Plus, if you pay late, banks can raise the interest rates on your existing balances, which typically doubles (or even triples) the interest you pay.
What’s the downside?
- A merchant could withdraw more money than you actually have in your account if your bill is unexpectedly large one month (for example, if you’ve run up your cell phone charges). Be sure you have a cushion in there to avoid getting dinged for insufficient funds.
- It’s unlikely, but a payee could take out more than the actual amount owed. So don’t sign up if you don’t trust the service. Regardless, you should still look over your bill when it comes in and monitor your account to make sure they there are no mistakes when the payment is made.
How do I sign up?
Similar to signing up for paperless billing, simply log on to your merchants’ websites and change your payment options. It should take only a few minutes.