How to streamline automatic payments
For some people, automatic payments are the greatest thing since sliced bread (except for billcutterz.com of course), but for others, it’s a nightmare of confusion and overdrafts. Automatic payments, when done right, will make your life easier and save you precious time each month.
There are two kinds of automatic payments: through your bank or through your service provider. Both methods are done online and it’s up to you to decide what’s best for you.
Setup direct deposit
First things first, make sure you always have enough money in your bank account. Direct deposit is the easiest way to ensure your paycheck has cleared before your bills are due. It also means less hassle for you and your employer so take advantage of direct deposit if it’s available to you. If you get paid on a rotating schedule, like every other week, that doesn’t always fall on the same day every month, it may get more difficult to keep up with automatic payments. However, that doesn’t mean you should rule it out – just be extra careful to avoid any overdrafts or returned checks.
Get a separate bank account
If you want an extra layer of protection from mistakes, setup a separate checking account just for automatic payments. This way, if someone makes a error, only this one account is affected. You can setup a partial direct deposit into this account, automatic transfer or a manual transfer each month. Again, this will work differently for everyone so figure out what works best for you.
Automatic payments through your bank
You can use your bank’s website to setup recurring payments to various service providers either on or before the due date. Your bank will either transfer the money electronically or cut the company a paper check and mail it to them. Automatic Bill Pay through your bank may be free or it may have a monthly charge.
This option is great because you’re protected by your bank’s security. You can’t be double-charged by a service provider’s credit card system. However, you are vulnerable to your own mistakes. Make sure all provider information is correct, their name, address and your account number. Also make sure the amounts are correct because if you are off by a decimal point, it may wreak havoc on your bank account.
Another hurdle is with varying bills, like utilities. If they are different amounts each month, this option may not work since you would have to either under or overpay some months or manually enter your bill amount.
Automatic payments through your service providers
Almost all service providers have an online payment system and most of them allow you to setup recurring payments. You give them your bank account information or credit card information and they will charge you when your payment is due.
If you have a varying payment each month, like electricity, this option will work best because your service provider knows how much you need to pay. The downside to this is that if your provider makes a mistake and overcharges or double bills you, you are on the hook to get it corrected.
Schedule payments for the same day
Scheduling automatic payments for the same day will make it much easier to track. Electronic payments and transfers may take 1-3 business days to clear your checking account so if you have the payments spread out over a week or two, it will be more time consuming to verify they cleared without a problem.
If your due dates are scattered over the month, you can always call your service provider and ask them to move your due date. Most providers are more than happy to accommodate you with this. If you enroll with billcutterz.com, we can do that for you while we’re saving you money on your monthly bills.