Direct payment can ease the hassle of paying bills

I hate paying bills. It’s not just saying goodbye to my money that hurts, but the tedious routine of writing and mailing checks. I’ve also experienced a few late fees when payments got stuck at the post office and didn’t arrive in time.

Then I discovered automatic bill paying, where your bills are paid automatically through your debit or credit card or through an electronic transfer out of your bank account. Most banks and payment card companies offer automatic bill payment services and more and more merchants accept this convenient – and often free – way to pay bills.

Automatic bill-paying features include:

Flexibility. Thousands of national and local merchants accept automatic bill payments through payment cards or checking-account debits, including phone companies, utilities, cable/satellite TV providers, insurance companies, gyms, and newspapers/magazines. Many lenders allow automatic payment for mortgages and other loans and may even offer reduced interest rates. And, you may be able to use it to pay income and property taxes.

Increased convenience. Automatic payment saves time, eliminates check-writing and mailing hassles and helps the environment by reducing paper use. It also lessens the risk of your check being delayed, lost or stolen by mail. Don't be daunted by having to fill out a few forms to sign up for automatic payment. Spending a little extra time this month will save you hours over the next year.

Payment options. You can choose one-time bill pay, where you first review your bill and then authorize payment, or automatic bill pay, where your bills are paid automatically at a scheduled time. Both options are typically available from your bank or payment card company. Some merchants do charge a small fee for accepting automatic payments, although most don’t.

Earn rewards. If your credit or debit card offers usage rewards such as free airline mileage or cash rebates, your reward points will add up as you pay your monthly bills.

Safety. Automatic payment transactions from payment cards are protected from card fraud, theft or unauthorized card purchases. Always monitor your monthly statement to identify unauthorized transactions. Practical Money Skills for Life, a free personal financial management site sponsored by Visa Inc. (www.practicalmoneyskills.com/security), contains detailed information on security precautions you should take with any financial transaction.

How to enroll. Contact companies that regularly bill you for services to learn their automatic payment policies. Your bank or credit union may offer the service and many online options are also available. Yahoo has a popular bill-paying program (http://bills.yahoo.com) and I’ve also used the free service offered by Billeo (www.billeo.com).

Be a savvy consumer when it comes to using a bill-paying service:

• Ask if there are any fees involved.
• Before signing the automatic bill payment agreement, make sure you understand and accept the terms.
• To stop service, you must notify the merchant as well as the bank/credit card issuer. Cancellation may take a month or two to become effective, so plan ahead.
• If your credit or debit card expires, the merchant may need the new card information to ensure uninterrupted service.
• Track expenses carefully and keep your budget up to date.

If you find solace in sitting down at the kitchen table to pay your bills, then automatic bill payment isn't for you. Personally, I'd rather spend that time doing something I enjoy – like just about anything else.