The Frugal Café | Photo credit: Rebecca Anne, "Flora's Cup"</a> | Creative Commons License,
Photo credit: Rebecca Anne, "Flora's Cup" | Creative Commons License,

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Save Money by Paying Your Bills Online

By Vicki McClure Davidson


Hidden costs abound these days, like demon cockroaches laying in wait while hiding in the walls of your home. Imagine my surprise when I recently took some time to analyze how much extra it costs me to simply PAY my bills.

I've included only my mortgage payment (Summer 2008 charges) below to show you how hidden costs can stealthily eat away at the money you’ve saved.

You may not have charges like this, but it’s wise to investigate to be sure and "nip it in the bud" with an alternative method of payment, if necessary. If you are being charged anything for paying any of your bills, that’s too much.

Below is the cost to pay just one bill, my mortgage, using different methods, shown as a one-time payment and as the grand total over the course of paying it for a year using that method:


over phone with electronic bill-payment gizmo – $8.00

Cost per year: $96.00
over phone with live person – $15.00 Cost per year: $144.00
to mail check to pay mortgage – $0.42 Cost per year: $5.04
to pay mortgage online – Zero Cost per year: $0.00


If you have just three bills that are levying a fee of $10.00 a month each against you to pay them by phone, you'll spend an additional $30.00 a month, or a whopping $360.00 a year... just to pay the bill. Ridiculous. That's a lot of groceries you could be buying instead, or one month's electric bill in Arizona during the summer.

And, I honestly don't understand why on earth it costs $15.00 to make a payment over the phone. Talking to someone for 2 minutes and have them punch in a few numbers on their computer for my payment, and then charging me for them to do their customer service job, is akin to robbery. At a rate of $15.00 for 2 minutes' worth of work, that is &450.00 per hour extra taken in by the company. If I opt instead to have my payment made by the electronic payment device over the phone, it is a wee bit of a savings (just $12.00 for the 2-minute transaction), but that is still an outrageous $360.00 per hour. How many payments per hour are being made by customers over the phone to these companies? The amount of extra money flowing into the company for minimal effort must be tremendous. Now, service charges do differ greatly from one company to another, so these numbers may not apply to you. But you definitely need to investigate.

Right now, the Internet is the most cost- and time-efficient way to pay your bills. Many companies encourage you to set up the payment today to be paid next week, so you can pay them all at once and not have to worry about them. If you're trying to pay your cell phone plans or Internet provider bills online, you can easily go to their website and pay online, or set up automatic payments to be made each month.

Even those companies that still don't have their own online payment systems (my gas company is one of them) are jumping on board and contracting other companies to handle the electronic transaction. These sites are extremely secure for sensitive information.

I'll be tackling the rampant growth of late fees and supposed service fees in another article, which comprise another area of gouging ("gouging" replaces my previous word choice of “larceny”) that has exploded in recent years.


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