|Looking for a convenient way to pay your
bills? Consider using automatic or online
bill paying to avoid late fees and the need
to write and mail a check or make a cash
payment each time a bill is due.
- Automatic bill paying means that the money
you owe each month (for the telephone, water,
electricity, mortgage, insurance, and credit
cards) is deducted directly from your bank
account. Where "minimum payments"
are acceptable, such as with credit card
bills, you can usually indicate whether you
want to pay each month the current balance
or just the minimum required. A second version
of automatic bill paying is having your credit
card, rather than your bank account, charged
automatically. If you put these expenses
on a credit card that gives you a cash rebate,
earns miles, or provides other incentives
for bill payments, you can even reduce the
effective cost of the bills (provided that
you then pay the credit card bill on time).
- On-line bill paying has a subtle difference:
the amount of the bill is not automatically
deducted from your bank account or applied
to your credit card. Instead, you must review
the bill and enter on-line whether or not
you approve of the charge and the amount
to pay. In many cases, this can be done anytime
after the bill is produced and a future payment
date can be set.
Before signing up for automatic or online
bill payments, here are a few things to consider:
- Understand how you will get your bill. As
a part of some options a paper bill is no
longer sent and either you get your bill
by e-mail or you must log onto a website.
- Know what happens if you dispute a bill.
If you use automatic bill paying, do you
get an immediate credit (if you are correct)
to your bank account or credit card, or will
it be delayed until the next billing cycle?
- Be sure you know how you can shut off automatic
bill paying and whether there are potential
costs or inconveniences associated with termination
of this option.
- In many but not all cases, automatic and
online bill paying is free. To avoid getting
trapped by a service that is not, be sure
to read the fine print.
Finally, you may also want to consider electronic
or internet banking. Essentially, these services
allow you to direct your bank to send a check
for you. Many of these services guarantee
delivery of the check but may charge a transaction
fee or charge your account on the day the
check is issued rather than the day it is
cashed. Electronic and internet banking usually
allow you to also set up repeating payments
where the amount of the check does not vary.