365 Frugality Tips: Use Online Bill Pay

January 9, 2013

Day 9: Year of Renewed Frugality

One of the first changes we made to our finances after becoming suddenly frugal was switching to paperless billing, automatic debit and electronic payments for paying our bills, and it’s one of the frugality tips I’m sharing with you today, because it bears repeating. We switching to online bill pay after realizing that we’d paid hundreds in late charges and interest fees in the past, because we hadn’t been very good about sending bills in on time.

It wasn’t that we didn’t want to pay those bills. It was because we couldn’t find those bills on a regular basis and didn’t have a schedule for bill paying.

Sure, we could have made the decision to get more organized and create a system for paying bills, but we knew ourselves: we wouldn’t stick with it. On the other hand, we could spend a few weeks collecting and organizing our bills, and then entering them into our online banking system. And then from that day forward, we would arrange to have our bank send out payments so that we would never again send a bill payment in late.

I recommend using your bank for this online bill pay, as opposed to going to each biller’s website and using a credit card to pay your bills. First, this adds to your credit card balance. But second, it allows your finances to get out of control because you may not be able to keep track of which credit card is paying which bill.

We learned this latter point the hard way, after getting some bills this past fall from two companies through which we had subscriptions–a daily newspaper and our cable company. (See? We’re still learning, too!)

Years ago we’d logged onto their site and entered a credit card to cover the bills, and all was fine–until the credit card expired and we, forgetting that this credit card was “out there,” decided to cancel it. Suddenly, we were receiving late bills from these two companies because they had no way to collect our money.

Luckily, we caught that in time, before it dinged our credit report. But paying bills late not only hurts you financially, with the late fees and interest you need to pay, but also with regards to your credit report. The last thing you want is a bad credit report.

Also, some credit card companies have a clause in their agreements that they can raise your credit card rates if you pay late. So there’s another way that online bill pay can help you.

If you’re not sure where you may have auto-pay set up on your credit cards, make sure that you review at least three months worth of your credit cards statements. Why? Some subscriptions or auto-pay plans debit every quarter versus every month. Since some are annual fees, it probably wouldn’t hurt to look back over a year’s worth of credit card statements, too.

Look, we’ve changed banks since we started living frugally–and paying our bills online through our bank–in 2007. We did that because our big bank that was owned by a giant corporation was starting to institute huge fees for things like online bill pay that had been free in the past. We switched to a smaller, local bank that offered all of those services we wanted–including online bill pay–and didn’t charge extra for it. Switching was a pain, to be sure, but after the initial inconvenience of having to update all of our bills, I’m pleased to report that we haven’t incurred a late fee in years through online bill pay through our bank!

If you handle your bills like we used to–with lots of bill payments sent late and interest charges adding up, you may be concerned about your credit rating. Thanks to one of my affiliate relationships, you can get a free credit report through Credit Sesame.

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2 Responses to 365 Frugality Tips: Use Online Bill Pay

  1. Janice on January 10, 2013 at 6:29 pm

    Forgot to post that the dollar stores are an excellent way to shop for many of the items for the goody bags. This way you can make your dollar stretch further and fill more bags :^)

  2. Janice on January 10, 2013 at 6:25 pm

    This isn’t related to online bill pay post above. Sorry, but when I was visiting a declutter posting, I couldn’t find a place to post comments, so here I am. I LOVE your sight! You do such a great job blogging! Thank you so much for helping those of us who need it!! My comment is about ways to get rid of the items when decluttering (a huge task I am undertaking as I get ready to sell our house after 16 yrs. of “STUFF” :-( Needless to say, I am overwhelmed, but determined to do this and don’t ever get in this predicament again! There are so many different ways to distribute our unwanted items. I’m sure we are all familiar with the traditonal ways i.e. online sites, consignment shops, garage sales, Goodwill, Salvation Army etc. Maybe this has already been covered somewhere, but what I would like to propose is donating your items that need a new home to a homeless shelter or transtional housing. Through our church, our families’ eyes and hearts have been opened up to the less fortunate to the HUGE need these places have. They are providing a much needed place for those who are trying to get back on their feet because of life’s circumstances. It is in these places that they are given hope and a second chance. They are always in need of everything from clothes to furniture to bedding, appliances AND your time to help volunteer for those who need something as simple as someone just loving on them. I hope the next time you are getting rid of those unwanted items, you remember those who are trying to get back on their feet. What a satisfying feeling to give to those who have nothing!! We have even started putting together a “goody” bag in gallon ziploc bags with all the essentials that we take for granted. Things like shampoo, soap, toothpaste, toothbrushes, water/juice, snack bars, crackers, pudding, fruit, socks (a coveted item here in the Northwest where it rains alot), scarves, hats, gloves or whatever else you think they would need. We have quite a homeless population here and there is always someone we can hand them out to while driving to wherever our destinations are. These bags are to tide them over until they have the COURAGE to get off the streets. In talking to those we now know, who have gotten off the streets and they themselves are now volunteering and giving back to those who they once were homeless with, these were a gift of love in helping them see that there are those who care for them in the simplest of ways and helped them once again, to gain hope in humanity and life! Try it….you’ll like it :^))

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