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Consolidating your bills into fewer payments can save you time—just receiving fewer bills in the mail every month will seem like a luxury. You may also save money, as it's less likely you'll accidentally pay late and incur extra fees. This page will show you the simple steps of bill consolidation.
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Consolidating Your Bills Tips
- Reduce the number of credit card bills you pay each month by transferring balances to the card with the lowest interest rate.
- Set up automatic payments online for your regular bills—save time as well as postage.
- Limit your charge accounts to eliminate extra bills and keep from overspending.
- Consolidate existing student loan debt following rate changes made annually on July 1.
- Check in with a verified debt counselor to help you strategize a debt consolidation plan.
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Introduction
- Consolidating your bills is a great way to make monthly payments more efficient and less of a headache. By reducing the number of bills you pay on a regular basis, whether through debt consolidation, balance transfers, or simply a little reorganization, you'll be more likely to make all your payments by their due dates, saving you time and money.
Step 1: Eliminate Unnecessary Bills
- It's possible that your bills can be combined or eliminated altogether.
Credit Cards
- It's advised that the average person carry between 2 and 6 credit cards. While some experts recommend carrying multiple cards, you may not need as many as you're currently carrying.
- To reduce the number of credit card bills you pay each month, cancel one or two accounts.
- Cancel your newest account(s) to maintain the good credit history on your older cards!
- Or transfer balances to a low rate card. You'll have only one bill, with less interest.
- You can keep other accounts open for future purchases.
Store Charge Accounts
- It's advised that individuals carry only one favorite store charge cards, since these cards typically have high interest rates and no rewards program.
- Limiting your store charge accounts will reduce the bills you pay each month.
- Avoid the temptation to open up new charge accounts, regardless of the incentives they may flash in front of you.
- Again, consider transferring existing balances to lower rate credit cards to eliminate excess bills and pay less in interest over time.
Mobile Phone Bills
- Consider switching to a family plan so that you only pay one bill each month for everyone's service. You'll eliminate all that extra paper, and probably save money, too.
Pay Cash
- Not only will paying cash eliminate the bills that show up a month later, you might even save quite a bit in the process.
- Many retailers have to pay a percentage of each sale to credit card companies. Since you paying cash can save them money, ask if they can pass that discount on to you, their loyal customer.
- Carrying cash can also limit your spending—you see how much you're spending instead of "just charging it."
Pay in Larger Chunks
- For bills like car insurance, you often have the option of paying a larger amount only two or three times a year. Doing so, if you can afford it, can make you eligible for a discount as well.
Step 2: Set Up Auto-Payments Online
- Most banks have an online bill pay option, that will automatically deduct regular expenses from your savings or checking account. You can often set up automatic payment for other bills, linking them to a bank account or credit card. Not only is online bill pay faster, but it's also more secure and easier to monitor. Plus you're saving checks and postage!
- Check in with your bank about automatic payments.
- Also investigate what your options are for other monthly expenses (phone bill, credit card payments, student loans, etc.).
- Be sure to keep a careful watch on what's going in and out, both for your financial safety and so you're aware of what you're spending.
- If you have attached recurring bills to a credit card, make sure you don't rack up high balances without realizing it.
- You're consolidating bills to save time and money, not to pay high interest rates!
- If you set up automatic payments for your credit cards, schedule that at least the minimum amount due be deducted each month from your bank account. This way you avoid late payment fees, and the interest rate hikes associated with missed payments.
Step 3: Consolidate Existing Debt
- Eliminating as many debt payments as possible will not only reduce the number of bills you have to pay each month—you'll be on track to pay down debt faster.
- See Mahalo's guide to How to Consolidate Debt for information on reducing your debt load.
- Be sure to read Bankrate's debt counseling advice before consolidating, particularly if your plan includes taking out a home equity loan.
- If you're suffering from too many student loans, visit Mahalo's guide to How to Consolidate Student Loans.
- Remember that student loan consolidation rates change every July, so be careful when you consolidate that type of debt.
- You can consolidate credit card debt by transferring balances to the card with the lowest rate.
- Carefully research any associated fees.
- Remember that balance transfers won't solve existing debt, and they can negatively affect your credit score.
- You may wish to seek out a professional debt adviser, such as one through the NFCC, the National Foundation for Credit Counseling, or the AICCCA, the Association of Independent Consumer Credit Counseling Agencies.
Additional Tips
- Although these tips won't necessarily consolidate your bills, they will consolidate the time you spend paying them!
Try Changing Due Dates
- Some creditors allow you to change your bills' due dates, which may make it easier to pay multiple bills at the same time.
- Making due dates fall as closely together as possible will reduce the times you must sit at your desk writing checks.
- Call creditors like your student loan administrator or your credit card company to see if you can change your due date.
- Be sure to consider when you usually receive your paycheck, so you'll have enough in your account to cover all the bills by their deadlines.
Limit New Accounts
- Think about the services you require and try to pare down the providers you use. Multiple accounts for movie rentals, department stores, or even newspaper subscriptions probably aren't necessary and eliminating them can make it less likely you'll overspend.
Resources for How To Consolidate Your Bills
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MSN Money: The Perils of Automatic Bill Pay
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Bankrate.com: 15 Secrets Debt Counselors Wish You Knew WARNING: Pop-ups
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Bankrate.com: Pay Cash, Get a Discount WARNING: Pop-ups
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Lifehacker: Speed Up Your Monthly Bill Pay with Firefox
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USA Today: Consolidating Student Loans at a Lower Rate Gets Tougher
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U.S. News and World Report: Simple Savings Steps
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Bankrate.com: 6 Good Reasons to Carry Multiple Credit Cards WARNING: Pop-ups
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MSN Money: How Many Credit Cards is Too Many?
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