Do You Do It Automatically?
The Dumb Little Man talked about a “revolutionary money hack” today that is actually one of the simplest things you can do to get your finances on track, and something I have been doing here at AinD.com for the last several years: automatic bill payment.
“Automatic bill payment?” you ask. Yes, automatic bill payment. Most companies offer it nowadays, and it’s such a simple thing that I don’t know why everyone doesn’t do it. There are typically two options for this: PAC through your bank account, or on your credit card.
What is PAC?
PAC stands for Pre-Authorized Chequing, and is used to refer to a payment that you pre-authorize. (See how I did that? Very sneaky.) This means that you’ve given someone permission to withdraw a certain amount of money directly from your bank account, typically on the same date each month. Starting up PAC withdrawals usually involve you filling out a form and submitting your signature to the payee, because you don’t just want to give anyone permission, right?
The second option is a Pre-Authorized Credit Card withdrawal.
What is a Pre-Auth CC withdrawal?
A pre-authorized credit card withdrawal is like the PAC withdrawal, except it’s done on your credit card. You still have to submit a written form with your signature, because again, you don’t want just anyone to charge up your credit card, right?
Are automatic payments/withdrawals for me?
If you’re like me, and often forget about what bill is due when, then automatic payments are definitely for you. I was getting tired of the late charges and interest that I was getting charged simply because I forgot to pay the bill on time. It’s not that I didn’t have the money, it’s that I just plain old forgot to pay the bill. So setting up automatic payments was an easy decision.
Which one do I choose?
Either option is good, it just depends on your comfort level. Personally, I don’t like the idea of someone having direct access to a bank account, so I always choose the credit card option. Plus I also earn reward points on my card since I have one of those affinity cards, so this is a good idea in my mind. If you’re looking for an easy way to earn reward points on your card, this is a good way to go. Of course you must have restraint to not use the card for anything else, but if you can resist, then you’re good to go.
In the end, automatic bill payments are an easy way to relieve some financial stress, since they let you concentrate on the things that really matter in your life. Are you going to give them a try? How many of you use them right now? Let’s hear from you.
