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A few days ago Adrian emailed me to ask:

“I have bills coming due at different times each month. Managing these is turning into a full-time job. Can you help? How do you pay your monthly bills? Do you cut checks each time or have you automated the payments somehow?”

Great question Adrian. I struggled with efficient bill payment for a long time until I finally managed to get it under control.

 
Image by Fr Antunes

I use credit cards to manage payment of most of my bills - of course, I pay the balance in full each month. Most of the companies that I deal with accept plastic as method of payment and I have given them permission to charge the amount due to my credit card each month. As a result, monthly bills for my cell phone, cable television, long distance calling card and favorite charity are all billed directly to the card. I prefer this approach over cutting checks for a number of reasons:

• Manage cash flow - I know I make enough each month to pay all my bills, but the bills may come due before I get paid. Using a credit card allows me to smooth the outflows and prevent an unexpected bill from torpedoing my checking account.
• Track expenses - I can track my spending history very quickly and get a quick snapshot of my monthly expenses without having to query multiple records (bank statements, checks, etc.)
• Dispute charges - It’s easier to dispute charges or discrepancies in a bill when the amount has been paid via a credit card as opposed to a check. Any dispute that you cannot resolve with the company directly can be brought to the attention of the credit card company which will then suspend the payment and help resolve the issue on your behalf.
• On-time payment - I know I will never be late for payments as the amount due is charged to the card automatically by the company itself.
• Points - I love the fact that I get credit card points for expenses I would’ve incurred anyway - credit card or no credit card.

The only recurring bills that I do not charge to the credit card are those that I cannot. Or more accurately, those that the company in question would not accept credit card payments for. This includes my mortgage payment, car payment and insurance premium. These three bills are debited from my checking account by the company directly. Because these bills have known amounts and due dates, planning for these is a cinch - I just need to ensure my bank account is adequately funded when these bills come due.

Where I can, I avoid cutting checks. I hate the exercise and licking envelopes gives me a headache. Besides, why spend money on stamps when the company is willing to accept payment via credit card or direct bank debit for free.

Adrian, I hope this gives you a few ideas to help manage your bills more efficiently. Readers may submit their own financial questions by leaving a comment below or emailing me. Questions will be answered in future posts.

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2. Avoid Payday Loans Like the Plague
3. How to Create a Zero-Based Budget
4. How Profitable is You, Inc.?
5. Emergency Fund Basics