Automatic Bill Paying
BOSTON (CBS) - Automatic bill paying is a great way to have your bills paid on time and it saves you time.
But, and there is always a but, in real life, if you don't balance your checkbook the automatic payment could result in an overdraft. You then have defeated the safety net of the automatic payment.
And what I have found is that most consumers do not balance their checkbook, most meaning 70%, 10% rarely and 20% do so faithfully.
My advice; balance your checkbook each month and you use software like Quicken to help you keep track of your expenses.
Banks make mistakes, you make mistakes, and by reconciling your checking account each month you can find any errors that could mess up your finances. There have been missed payments by your financial institution and you are responsible to fix the problem.
Checking your bank balance on line several times a month is a good habit to start. Check your credit card balance while you are on line as well.
Here's why; I heard from a listener who wrote me about a possible scam. He had noticed his checking account had been debited for a product he can't remember buying. This went on for 8 months before he realized what happened.
I also like to use my credit card for many of the monthly bills like the cable, phone, health insurance, car insurance, and home owners insurance. They get paid on time and I get the points plus the float. You can keep a running total in your checkbook so you know what to expect on your credit card bill.
I could do automatic bill pay with these bills because I know I will pay off the full amount of the credit card as I have budgeted for these expenses.
I like that I get one bill instead of many and I really like the getting the points which are a bonus. I don't pay things like real estate or federal income taxes with my credit card because usually there is a fee to use a credit card.
The National Foundation for Credit Counseling (NFCC) is the organization I recommend most often to listeners whenever they tell me they need help with credit card debt. It has many local member agencies that it can recommend.
