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Automatic & Online Bill Paying

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.

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