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Why It’s Important to Pay Your Monthly Bills on Time

Last Updated: January 25, 2024

5 min read

Table of contents

Key points about: paying bills

Building your credit score and keeping your utilities working are some benefits of making monthly payments on time.
Setting up automatic bill payments or payment due date reminders may help you keep track of payments.
Setting up a budget should also help you allocate money for and pay bills on time.

Getting into the habit of paying your bills by their due dates can pay off later on. Whether it’s rent, a utility bill, your cellphone, or your credit card, it’s important to plan ahead and make sure your monthly bills are paid on time. Even one late payment can affect your credit score or cause late fees, which can add to your stress if money is already tight. Let’s review some useful tips for paying bills and how to establish good habits to help you always pay bills on time.

How to pay bills

You can still pay bills the old-fashioned way, which for many is to fill out a check and envelope, and slip it into the mail at your local post office. Depending on the financial institution or the merchant, some customers may choose to go in person to pay their monthly bills. But technology has made it easier and more convenient for some to pay their bills using online banking.

Many financial institutions or merchants now accept online bill payment. This may be easier for some because you can input your credit card or payment information one time and it’s saved for future use. Then with each monthly bill, it’s usually as simple as clicking a few buttons, verifying all the information is correct, and submitting your payment

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In addition, you may be able to use an online or money transfer service mobile app to pay bills. These may work similarly where you set up an account using your checking account or credit card information, and you process the payment using the service. For instance, while some landlords may prefer paper checks, others may allow payment from PayPal or Venmo.

How you pay your bills may depend on personal preference and what types of payments are accepted. But no matter which payment method you choose, paying your bills on time is still vital to good financial health.

The benefits of paying monthly bills on time

Does it really matter if you pay your bills late? Short answer: You bet it does. While it can be tempting to spend the money that should go to your credit card payment on dinner at that new neighborhood restaurant, there are some good reasons why paying your bills on time is more important. For starters, this monthly payment habit can benefit you and your financial future. Paying those bills when they’re due can save you money. Here are some benefits of paying bills on time.

Managing your bills saves you money

Spending money on nonessentials–movies, clothes, a round of drinks–may feel good at the time, but if you’re on a tight budget, the spending hangover may not be worth it. By making sure you have money in the bank, you can pay your essential bills in full and on time. This can help you avoid unnecessary late fees, and in the case of paying your credit card in full each month, save you on interest charges.

Timely payment of bills helps your credit score

Learning to manage your money and how to pay bills on time now will have benefits in the future too. When it comes to using credit cards responsibly, late payments on credit card bills can not only cause late fees and increased interest charges, but they can also negatively impact your credit score. Staying on top of paying bills now can help you avoid credit issues later on.

Keep your utilities and phone working

By missing payments on your utility bills or your mobile phone, you could be hit with a late fee, or it could cause them to be shut off completely. Keeping track and setting reminders for them can help you avoid a lot of hassle later on.

How to pay bills on time

Here are some tips you can start using right away to help you remember to pay bills on time.

Budget your monthly household bills

Setting a budget of all your monthly bills, from utilities to your credit card payment, can help ensure you’ll make all of your payments on time. If you have an estimate of how much you have going out each month in bills, you can compare it against your income and make sure to always have enough in the bank to cover them when they’re due.

Automatic payments

You can set up automatic payments using your bank’s bill pay feature or on the service provider’s website. Your cell phone carrier and electric company, for example, may offer an option for you to pay automatically each month. Setting up payments in advance ensures that your bills are always paid on time.

Depending on the provider, you might also be able to automatically pay your bill with a credit card, which means that you would only need to remember to pay off your credit card balance each month instead of juggling payments to different providers.

Did you know?

Discover allows cardmembers to set up DirectPay, which withdraws monthly credit card payments from a designated bank account automatically. You can set DirectPay to withdraw your full statement balance, minimum payment amount, or another amount of your choosing.

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Create alerts to keep track of bills and payments

Depending on your preference, you can set different types of alerts to remind you to pay your monthly bills. You can create alarms or reminders on your phone, keep notes in your online calendar, or even simply write reminders in a paper planner.

All that matters is that you find an alert system that works for you, and helps you remember the due dates for your monthly bills. You may even be able to change the due dates for your credit card payments, so they fall on the same day as other bills and you can pay them all at the same time.

Sign up for email statements and online bill pay

Many companies send email or text reminders about bill payment due dates, and some may allow you to receive your statement electronically rather than a paper copy through the mail. Typically, all you need to do is log in to your account and opt-in to receive those reminders. Once you’re logged in, explore the online bill pay option if available, so you’ll always have a way to quickly make timely bill payments.

Bottom line: keep your monthly bills current

By spending some time getting organized so you can pay your monthly bills on time, you’ll save yourself late payments and fees, and won’t hurt your credit score. Plus, creating a system for paying household bills on time can be simple. Once you’ve got it dialed in, you may only have to spend a few minutes each month thinking about paying bills.

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