Given Melanie's concern with avoiding late fees and the available bill payment methods, we need to determine the most effective method to ensure her bills are paid promptly and no late fees are incurred.
From examining the options:
1. Pay by check
2. Pay online
3. Set up automatic payments
4. Pay by telephone
The best method for Melanie to use, considering her goal to avoid late fees, is 3. Setting up automatic payments ensures that her bills are paid on time without the need for manual intervention, thus greatly reducing the risk of incurring late fees.
Therefore, Melanie should use method 3 to pay her bills.