Published on June 23, 2008, by

Nearly every day I read an article on The Consumerist about massive late fees or talk to a friend about the hassles and fees associated with paying bills, and I’m consistently dumbfounded. How is it that so few people take advantage of the free, online bill-paying that their bank undoubtedly provides with their checking accounts?

Of course no payment system is likely to help much when you’re truly short on cash and falling behind on paying your bills, but it seems most of the time the headaches and exorbitant fees could have been easily avoided if something — disorganization, procrastination, or shady changes in terms or due dates — hadn’t caught the hapless bill-payer off guard.

The antidote, for me, is the online bill-pay. My run-of-the-mill Chase checking account includes free, unlimited bill-paying, and yours most likely does, too.

This is not to be confused with expensive wire transfers, e-checks via phone, or other fee-heavy bill payment “services” credit card companies like to push. Don’t fall into that pit of fees masquerading as convenience.

Note that I’m also definitely not talking about the much less desirable automatic debits offered by most monthly billers. Those are fraught with potential problems since once you go through the pain of signing up using a completely independent system for every bill payee, you’ve given each of them unlimited access to debit your bank account or credit card at will. You also have to manage umpteen different logins, taking pains to log into each site monthly and find out whether they made any errors when they yanked money out of your account. And don’t get me started on checking account direct debits for places like health clubs. Avoid these arrangements like the plague.

Instead, we’re going to let all these companies think we’re living in the stone age. Just arrange to have them all bill you monthly via old-fashioned mail. Some companies are starting to charge for paper bills, so it may not be worth it in every occasion, but the system works best when there’s a nice, orderly paper stack of bills to deal with.

Here’s the system that works for me:

  • Throughout the month, bills arrive via mail and they’re placed in a (hopefully) short stack next to the computer — sorted in order by due date if I’m so motivated.
  • If any payee is new, I first create a new payee in the bill payment system by entering the company’s mailing address, phone number, and my account number for that payee. This takes only a minute and doesn’t require you to contact the payee at all. If they normally accept checks via the mail, they’ll have no problem accepting payment this way — I promise.
  • Then, two or three times a month, I spend literally a few minutes paying a manageable group of bills — without stamps, without writing checks, and without paying a single penny in fees. Pick the payee, enter the amount to pay, enter the due date, and you’re done. The bank decides whether to pay the bill electronically or via a check on your behalf, but you don’t have to worry about that. The bill will be paid, and the money will have stayed in your checking account until the last possible day.

It’s painless, efficient, and free. It also makes unexpected fees nearly extinct as long as you have money in your bank account.

Now why isn’t everybody doing this?