There isn’t enough time to do all the things we want to do, let alone the things we dislike – like paying bills. We get bills, and we can’t get away from many of them.

Whether you rent or own, you’re subject to a variety of monthly obligations: Electrical, gas, water & sewer, telephones (home & wireless), cable, Internet, insurance (home & auto), credit cards, condo fees. You can bundle some of those bills, but you’re stuck with others. What to do?

You can free up some time and improve your finances by automating the tedious task of paying your bills. Put your regular bills on “cruise-control,” or make sure a bill gets paid without you having to lift a finger every time. It’s work up front, but the payoff is worth it.

Companies that issue recurring bills frequently permit you to set up pre-authorized payments, either direct from your bank account or from a credit card. I prefer using a credit card for two reasons:

1. I use a credit card that pays me back a cash reward equivalent to 1% of purchases — and yes, I do pay the balance in full each month, and
2. I prefer to not disclose my bank account number, when I can avoid it.

Thus, I pay a few utility company bills from my bank account (i.e. those companies not accepting credit card payments) and most everything else by credit card.

The process for setting up pre-authorized payments usually involves mailing in a form or a letter, or using the company’s secure web site to provide the same information. It can be tedious, but it’s a one-time thing, and you get a recurring payoff.

Once you’ve set up pre-authorized payments for all of your regular bills, you can relax. Instead of sitting down two or three times a month with envelopes & cheques or doing data-entry with your bank’s online service, you can simply review & file your bills as they arrive. Do review your bills — though a glance is often enough to tell you whether all is well, or not. (Don’t just toss your bills, unopened, in a drawer.)

But what about the credit card bill? Some banks even offer an automatic-payment feature for the credit cards they issue, whereby each month they deduct from your bank account either the card’s minimum payment, some other set amount, or the full balance due. The minimum payment could be handy to make sure that you at least never miss a payment, helping to protect your credit history, while still allowing you the flexibility to pay off the remainder at a more convenient time during the month.

If your bank doesn’t offer such an automatic-payment feature for your credit card, you may still be able to simulate a “minimum payment” feature by estimating an amount yourself and setting up a recurring online bill payment to the credit card. You’ll still want to pay the balance at some other convenient time of the month, but at least you can be assured you’ll never miss a payment.

After you’ve put your bills on cruise-control, the freed-up time could be put to better use. In lieu of reacting to bills, use the time to think strategically about your money: Could you be saving more, or investing better? What other improvements might you consider?

Recently, I experienced two cases where — if I wasn’t paying attention — I might have spent money to receive nothing, simply due to using my credit card to buy things outside of Canada, using foreign currencies.

Story #1

In early December, I placed an online order with a reputable grocer in the U.K. that ships to Canada. I ordered some holiday shortbread cookies, puddings, etc. and I used my Visa card to pay for my order. The vendor’s invoice total was £84.70 (British pounds), and the resulting charge to my Visa was $138.42 (Canadian dollars). The vendor promised to deliver my order by December 19th.

By Christmas, I still hadn’t received my order. I was unsuccessful in contacting the vendor during and just after the holidays, so I decided to call my credit card issuer and see what my options were.

My card issuer said I had up to 90 days from the original posting date to dispute a transaction. They explained I would be entitled to a full refund if the vendor couldn’t prove I received the goods. However, they suggested I could try contacting the vendor again, since disputes could take a while to resolve and I still had ~60 more days to initiate one.

I soon tried calling the vendor again in January, and I eventually got a live person on the phone. I learned my order had never even been shipped because the demand for their Christmas goodies exceeded the supply! I was upset, though not so much at the lack of supply but at the lack of proactive communication from the vendor. They sincerely apologized and confirmed I would be getting a full refund to my credit card.

I soon saw the refund credited to my credit card account, though in the amount of $129.38, not the original $138.42. I was out $9.04, even though the vendor had issued a refund for the full amount of £84.70.

It was going to be a hassle with the overseas time difference and call hold time to get the vendor on the phone again about the missing $9.04, so I hesitated to call. But, I was curious about something else. Would the credit card dispute option have avoided this difference?

I called my card issuer again and asked if I would have received a 100% refund of the original Canadian dollar transaction amount if I had initiated a dispute and prevailed. The representative said yes, because the vendor was at fault and no goods even shipped, they would have sought a recovery of the full Canadian dollar amount. Then the representative offered me a credit for the $9.04 difference! While my card issuer was not at fault, that $9.04 was mostly foreign currency exchange fees I paid them, so I gladly accepted the credit and thanked them.

Story #2

Also in January, I was charged the regular monthly fee for one of my U.S.-based web hosting service providers. The provider’s invoice was for US$12.97, and the charge to my card was C$13.70. However, the provider erroneously charged customers 3 times in January instead of the expected one time. Oops! The provider quickly realized their error and issued two compensating credits for US$12.97, which were posted to my credit card two days later. The Canadian dollar value for the credits posted were C$12.83 each.

Again, even though the service provider had from their perspective issued a full refund to correct the error, it was less than a full refund in Canadian dollars on my card. I was out C$1.74. This time, I followed up with the service provider and pointed out that the extra transactions were due to their error and that I was still out C$1.74 as a result. They were pleasant to deal with and issued me a $5 credit, more than I was asking for.

Credit Card Foreign Currency Transaction Risk

These two experiences highlight a risk of buying goods or services outside the country: When you buy something from a foreign vendor using your credit card, the card issuer effectively purchases foreign currency on your behalf to complete the transaction. Exchange rates fluctuate and can move to your disadvantage when it’s time for a refund.

Furthermore, card issuers don’t buy and sell foreign currency for free. In addition to the usual fees charged to merchants, card issuers also charge cardholders in cases like these, typically a fee of 2.5% on both charge-type and refund-type transactions. It seems the only case in which a foreign currency charge and refund may fully cancel out is when the vendor reverses a charge quick enough, before the original charge has even been posted to the account.

When you are going to buy something online from another country, acknowledge this cost and risk. If you should find yourself in a situation where you have paid money for nothing through no error of your own, consider following up and getting your money back.