Credit Myths: Automatic Bill Paying/Never Miss A Payment

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%, with 10% doing it rarely and 20% who do it faithfully. I fall into the category of doing it 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 can make mistakes, and by reconciling your checking account each month you can find any errors that could mess up your finances. If there is a missed payment you are responsible for 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.

I heard from a listener who told me he had not noticed his checking account had been debited for a product he can't remember buying. This went on for months before he realized what happened.

I like to use my credit card for many of the monthly bills like the cable, phone, health insurance, car insurance, 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, but I know I will pay off the full amount of the credit card each month because I have budgeted for these expenses.

I like that I get one bill instead of many and I get cash back which goes into my granddaughter's college account.

I don't pay things like real estate taxes or federal income taxes with my credit card because usually there is a fee to use a credit card.

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You can hear Dee Lee's expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

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