Five Common Myths About Paying Bills

in hive-167922 •  17 days ago 

Monthly bills are a standard part of most adult's lives. Each month you pay for your utilities, credit card, insurance, and mortgage or rent. You may pay these bills automatically through direct deposit from your bank or the old fashioned way, by writing checks. This process is so common place that most people don't even think about it, simply doing what they have always done. This laid back attitude towards bills is the reason that many people share misconceptions about the process. Some of these myths barely affect you, but others can be very dangerous to your finances.


Here are five common myths about paying bills and what you should know about them.

If You Mail Your Check by the Due Date Your Payment is On Time - This myth is primarily due to tax season. April 15 is the postmark deadline for the IRS for filing your taxes. Private companies are not held to this standard. Credit card companies, in particular, often require that your check is received by the due date. If it isn't, you will pay late fees. The U.S. Post Service assures that all first class mail will arrive in three business days, but that is a dangerous thing to rely on when paying bills that have penalties. If you want to be safe, mail any check at least a week in advance of the due date, and even earlier if holidays are upcoming.

You Can Pay All Bills Online or Over the Phone with a Credit Card - Most private companies accept credit or debit cards, but even in 2020 a few still require checks or direct bank transfers. Utility companies, especially, are unlikely to accept payment by credit card. Also, some companies will accept credit card payments, but will charge you an additional fee for paying that way. Furthermore, most credit card companies will not allow you to pay your credit card bill with another credit card.

Utilities Companies Will Shut You Off if You are Even One Day Late - This myth is propagated by movies and televisions shows, but isn't even vaguely true. Gas, electricity, and water will continue be supplied to your home, even if you miss a payment. In fact, on the first missed payment, you probably won't even get a notice that you missed a payment. You will probably just see the last bill added the next month's bill. It usually takes at least two missed bills to receive a notice and may actually take a few months before you get shut off completely. This doesn't mean you should miss bills, just that you shouldn't be terrified of the consequences if you accidentally do. The one type of utility that will probably be shut off the moment you miss a bill is your cell phone, though even there your company may be lenient if you have a good history of paying on time.

Money Will Deducted From Your Account on the Auto Pay Date - If you have set up auto pay, you have probably received notifications that say your bill will be automatically paid on a certain date. While it may seem that the date is incredibly specific, it is actually more of a guideline. It is not uncommon for the money to actually get deducted from your account one or two days before or after the date. Keep this variability in mind if you are spending close to your limit on a particular account. A deduction even one day early could cause you to overdraft by accident if you expected to make a deposit in time. In general, assume that any auto pay money is already spent and you avoid potential problems.

Cash Deposits Before a Check is Cashed Will Always Cover the Check - Cash deposits are usually credited to your account with 24 hours. In fact, most cash deposits are usually credited to your account within minutes. But this isn't always the case. Sometimes a cash deposit simply won't be credited in time, even when the company cashes your check after the deposit. Don't wait until the last minute to deposit. On the other hand, banking is a lot faster today than any time before. Many banks will credit electronic and check deposits to your account before they are confirmed and that pending money will pad your account against any expenditures. Don't rely on this, but it is a nice safety net if funds get low. Finally, you shouldn't think that post-dating a check will protect you either. Banks aren't supposed to accept a check until the date written on it, but due to the human factor that post dated check might be counted against your account before the date on it.

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