Ways to Pay for Things
Once you know what you are spending money on, you can decide how you pay for things. You might decide to pay for some things with cash. Paying with cash is usually only used for smaller purchases or expenses.
Other ways to pay for things are:
- Checks or debit cards
- Credit cards
- Automatic bill payments
Checks and Debit Cards
If you have a checking account at a bank, you have more options to pay for things. You can write a paper or digital check. When you write a check, the money comes out of your bank account. You can also ask your bank for a debit card.
A debit card also takes money right from your bank account to pay for things. It comes out right away, just like if you were paying cash. You must be careful not to spend more than you have in your bank account when using a check or debit card.
Credit Cards
A credit card is like a debit card, but you are borrowing the money to buy things, like a loan. You must pay back the amount you borrowed or pent with the card. It is important to make payments on time each month. You might also have to pay extra costs called interest to late fees.
There is more information on using credit in the later sections.
Automatic Bill Payment
Automatic bill payment is a way to work with your bank to send payments on scheduled dates for bills you pay each month. Once you set it up with your bank, it happens each month until you tell them to stop. This is a way to make sure payments are made on time and you don’t get late fees.
Make sure you know what account is connected and you are making sure payments are sent only when they need to be. Be careful to make sure you are not paying your bills more than one time!