In my house, I am the one responsible for paying bills. The bills come to my email address. I keep track of how much is due and when, and on payday, I’m the one that logs in, makes the payments and then balances the checkbook. I figure out how much we’re going to need for cash expenses each pay period. I pay daycare. I submit the dependent care reimbursement form. I track our savings and, when we were deep in debt, I tracked our payoff schedule. I call the bank when something is off. In short, when it comes to our day-to-day finances, it’s my job.
My husband is fully aware of everything that happens (despite all that is going on, our finances are still intertwined. More about that situation on Friday). He knows how much all the bills are, what expenses we have coming up, how much cash we need–nothing is a secret. He just chooses not to participate beyond having “budget meetings” with me. This is actually a blessing for two reasons–1) his method of balancing finances makes absolutely no sense to me and 2) I have control issues so me being in charge is comforting. He is also extremely disorganized and, while I know all bills would get paid, I don’t fully trust that everything will get paid on time. So, having me manage our money makes total sense.
Except I’m exhausted from keeping up with everything. Having to manage and remember 12 different passwords and making sure everything gets paid on time and that all the bills make sense and balancing the checkbook and making sure all the EFT payments process correctly is tiring. And with the ever increasing amount of responsibilities I’ve been assuming, I’m starting to get a little forgetful (fortunately, nothing is late but I have forgotten to write down a bill or two and luckily caught it in time). Given all of this, I’ve been trying to think of a way to streamline the process and I just keep coming back to one method. Using a credit card.
I’ve heard that there are people who can use a credit card responsibly. I’ve heard that there are people who use it and–gasp–pay it off every month. I’ve heard that there are people who earn rewards from credit cards. I’ve heard that, contrary to popular opinion, credit cards are not inherently evil. I’ve always been a bit leery of these people (since I have a proven track record of not being one of them) but, being involved in the personal finance world, I’m learning that they’re not that scary after all. In fact, they’re quite smart. And they clearly know something I don’t.
So I’m starting to think that maybe automating my bills that are not already scheduled for EFT via a credit card may be a good thing to do. Here’s my plan:
- Track my bills so I know how much I’m spending per month
- Pay those bills with a credit card
- Set the money for the bills aside so that when the credit card statement comes, I can pay it in full
- See my stress decrease
That’s it. That’s the plan. It would simplify things in that I’d only have one main bill to pay every month. I learned the hard way what happens when you don’t pay off your credit card every month and I have no interest (pun not intended) in ever doing that again. There are certain expenses, like clothes, groceries, daycare, toiletries, and pet food, that I would pay for in cash (because I cannot be trusted with a credit card around those items. Also, I refuse to pay the extra 3.5% for using a credit card to pay for daycare) but my utility bills and car payments would be paid via credit card.
I like this idea because it’s a lot less remembering for me. On payday, I’ll have to set aside the total amount paid on the bills to ensure that there’s enough money for the credit card payment but I won’t have to remember anything else like due dates or passwords. The downfalls, of course, are failing to pay the credit card off and/or potentially overusing it. I know myself well enough to know that I won’t do that but you never know.
I am not a fan of change. I’ve been paying bills the same way for years. But I’m frustrated with feeling like I’m always dealing with day-to-day finances. It’s a tough call.
What do you think? Do you use a credit card in this way? Am I a fool for contemplating it?
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[…] of using credit. It just doesn’t interest me. At one point, I entertained the thought of automating my bills with a credit card but I’ve opted to just use the debit card for that instead. I’m not saying that these are bad […]
I love it when people realize that credit cards can be a great tool if used the right way! Everything I can, I have automatically billed to my card. Unfortunately, some things still aren’t there yet, and that sucks but what can you do? I’d say you are a fool if you don’t consider it: why wouldn’t you want to gain that time back, and ensure your bills are being paid on time? Let the anti-credit card people flap their gums all they want, but this is your decision and if it makes things easier for you-screw what anyone else thinks (unless they want to pay your bills, then they can talk)
Eric J. Nisall recently posted…Try This Technique To Get People Talking About Your Business
It’s not so much a matter of not paying my bills on time; I do that. I’ve never been intentionally late on a payment ever (now, whether the payment was processed in a timely manner is another story). It more a matter of it’s annoying to have to remember all that information. I just want it to be easier!
I meant it in a general sense. I’d never accuse you of paying late 😉
I’ve tried so many times to make things easier, but the problem is that others don’t allow it. I don’t know why you can’t put a car payment, mortgage or utility bills on a credit card. That would make things too easy I guess.
Oh yeah, and with some bills, there is a service charge to pay with either a debit or credit card, so watch out for that too.
Eric J. Nisall recently posted…Try This Technique To Get People Talking About Your Business
We use our credit card for every expense we can. The only thing that comes out of our checking account our those few bills that can’t go on a cc and the monthly CC bill. It really helps us manage cash flow. I basically have to worry about the amount in my checking account twice a month, the 1st (Mortgage and daycare) and the 20th CC bill.
DH & I are both responsible spenders and realize using a CC isn’t a pass to spend more. But for us it is a great tool. This year we were able to get a rental car for a week and $300 in gift cards with the reward points. And as you said, I don’t have to worry about bank balances and due dates quite as much.
Heidi, I know you and I know how responsible you are. And your husband, too. I think you guys are a great example of using credit responsibly.
I only have one thing autobilled to my credit card (my cell phone bill, which is the same every month and which I double check before it hits the card anyway, just in case). Everything else I pay by credit card, if I can (utilities don’t always let you use a credit card, but require a routing number & account number).
I like to use the credit card for the points, but I don’t like to do autobilling because in the past I’ve had a problem getting it revoked if the merchant charged things incorrectly. I had one situation where every month I had to call the card company and have them reverse the charges on a gym membership that I’d canceled. I had proof it’d been canceled. But they just could not get it together to stop the payment from going through every.single.month.
That, to me, was much more of a headache than logging in to a few accounts once a month to pay a bill manually.
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Thanks for this insight. That is something I’m concerned about, and having to deal with credit card companies is a hassle. I’m sorry that yours was such a pain!
I always pay my bills with 2 options, automatic debit card payments, or automatic EFT directly from my bank account. Another good option is online bill pay through your bank, sometimes they charge you for it but a lot banks do it for free.
Automating with a credit card isn’t a bad idea either. I think it would be so much easier and save you tons of time than the method you are using now. Sometimes change is for the better (don’t worry I normally hate change too).
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I used to use my bank to pay bills. It was free but it took forever. I would schedule the payments on time and then the bank would dealy sending the payment for whatever reason. Now that I have a new bank, I’m not taking any chances (old bank was taken over by a larger company). I’m hoping that this is a good change. What’s really nice is that I can always go back!
I’m like you: I haven’t been the best with credit cards in the past, so I am leary of using them at all, even with points and stuff offered. I’d rather just pay from my actual account than add another bill at the end of the month. But if it works for you, more power to you!!
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Thanks! I’m trying to look at it as substituting one bill for 5. It’s the same money just used differently.
I don’t know if that makes sense.
My system is a little more complicated than necessary because I keep some credit cards for occasional use and charge $5 in each of them every month which are paid automatically.
Other than that complication, my is pretty streamlined. All the bills recurring bills are auto-paid via credit card except one which didn’t take a card so that is paid via my checking account billpay. I check my credit card and pay it off every month. So I really have to see only one card. Sometimes I have to juggle money to pay the bill because we get only enough to live in our checking account, the rest of the pay check is split into different savings account. If I splurge too much one month I have to move some money over from one of my savings to pay the bill. So thats my system. It will take a few months to get into the rhythm but I am sure you will like the convenience of credit card.
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I can see how all the savings account might jumble things. I only have 2 savings accounts–one with my husband and one for my daughter, and any subsets are fed off of the main one. I’m not organized enough to manage more than that! I guess that’s the allure of using the credit card.
My employer is credit card issuer. I may be biased towards credit cards but, when I worked for an IT company I did use credit cards extensively. Great resource to build credit, excellent tool to earn rewards. And good for pockets as it doesn’t take any real estate in your pants or bags.
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I’m not so much concerned about the real estate (which is an interesting way of looking at it) or the rewards but more the ease and convenience. Which is also why I’m nervous…
I think it’s a great idea, as long as you stay on top of things. I use my credit card for everything and love getting the rewards each month. 🙂
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