Payment Management: Which Payment Types Are Best For Which Bills?

paying bills

Bills can be considered one of the requirements of simply living. You're always going to have an electricity bill, a water bill, a phone bill and other bills such as rent or a mortgage payment. These bills will always need to be paid on a regular basis.

The problem is that these bills can be difficult to handle. Trying to pay something as simple as your mortgage payment with a credit card may be a bad idea due to the ease that information about your payments can be lost.

Let's take a quick look at what type of payments mesh the best with certain types of bills.

1. Utilities and Online Bill Payment

You may be used to writing checks or submitting your credit card number when you pay your water, electricity or gas bills, but there is a better way to pay your bills. You can utilize online bill payment services to accomplish this.

Many banks provide online bill pay services for free, and other services that specialize in it exist. You can pay all your bills in one place, and some services even allow you to automatically pay your bills according to a schedule that you preset.

This ensures that your bills will always be paid on time and without fail. You won't run into extra fees and late charges, nor will you need to add another worry to your daily routine.

2. Mortgage Payments and Checks

When you pay a lender for your mortgage, the best form of payment you can use is generally a check. These give you a quick and easy way to prove that you paid the correct amount on time. You need only flip through your checkbook to find the copy of your check.

The best part about checks is that they can come with a variety of extra features that can make balancing your finances even easier. You can even get a personalized checkbook that makes checks as fun to use as they are reliable. Don’t worry if you don’t already know where to buy personal checks—you can get them from your bank or from a third-party provider without too much of a struggle.

3. Online Payments and Credit Cards

Some bills need to be paid online. They may not support automatic bill payment, which means that you have to log in to the website of a given company to submit your financial information. While this process is already tedious, it can also be considerably dangerous.

It only takes one breach of information for your financial information to be spread around the Internet. Your bank account number, routing information, name and a plethora of other pieces of information could be exposed.

That's why for online bills and almost every purchase you make online where there isn't a better alternative, you should use a credit card to complete your transaction. The credit card company will do their best to protect your information from exposure, and they will generally be agreeable when it comes to issuing new cards due to a breach of security.

4. Recurring Small-Scale Payments and Payment Processors

Small-scale recurring payments can include anything from a car loan that's less than $5,000 to the cost of a low-cost web hosting plan. They're the type of payments that have a relatively fixed price that you will continue to pay for a number of years.

The best solution for these types of payments is to use a payment processor such as PayPal. These will allow you to set up a recurring payment that pays the same party a fixed amount each month. You can link the payment processor to withdraw funds from a bank account or you may choose to integrate it as a new type of checking account.

Given the numerous features and added safety of such processors, they make for excellent alternatives for paying parties. The best part is that you'll never have to give away information such as your credit card or address, as the payment processor acts like a secure middleman for the payment process.

Paying Bills More Safely and Reliably

There will always be a number of payments that require your attention every month. The best thing you can do is use the best type of payment that meshes with that particular bill.

The last thing to keep in mind is that cash should always be used as a last resort. It's hard to trace, and you have no reassurance if something does go wrong that you will get it back.

The above payment methods have been field-proven to work with the corresponding types of bills. You'll encounter fewer hassles and make your life easier when you use them.

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