How Do I Pay Bills Without Snail Mail

Question:
I just acquired my first credit card and I had a question that hopefully you can give me some insight on. How do I go about registering my credit card so that when I order something online, instead of paying my payments via mail, money will be taken out of my account? Would I even be able to do something like this? I don't really like the idea of paying through mail.

Mike:
You are describing what is called "electronic payment," also called "e-payment." Basically, you want to transfer funds from one account, usually a checking or savings account, to your creditor for payment on your account.

There are two ways you can accomplish paying your bills electronically without having to mail checks.

Your creditor most likely offers a Web site where you can go and activate your account for online access. Once you activate your online access you will be able to see your account activity online. Once common online feature is bill payment which will allow you to send payments from your checking account directly to the creditor for the amount due on the account or any amount you tell your checking account bank to send to the credit card company. You will be able to set the date of payment, schedule email reminders, etc. You will also be able to set up regular monthly payments of the same amount or one-time payments which you control each month.

If your banks offer this service be sure to read and understand the time requirements needed to move money from your checking account to the creditor. Even though it is an electronic payment, banks usually require a day or two for processing of the payment. In some cases, even though you are setting up an electronic transfer of funds, your bank might actually have to create a check and mail it to your credit card processor, so extra lead time will be needed.

Also, check for any fees. A dollar fee here and there may not seem like much but by the end of the year, bank fees can really add up.

The second way to pay bills electronically is to go online to the bank you have your checking account with and set up online access. (You should do this anyway so you can check your accounts on a regular basis rather than waiting for statements to come in the mail Online you will be able to see your checking and savings account activity, receive e-statements, and most banks offer Bill Paying services, usually for free. Then you simply set up a monthly electronic payment directly to your credit card company and any other bills that you pay regularly each month.

Paying bills via e-payment is a good way to avoid late payment fees as long as the e-payment fees, if there are any, are not too high.

Good luck and be careful how you use that new credit card!