Paying the Bills: Auto-debit and online bill payment

I hate paying bills.  I guess everyone does.  But I don’t hate it near as much now as I did a decade or so ago.  And it has nothing to do with having enough money to cover everything.  That’s still a challenge.  It has everything to do with the Internet and automation.

There was a time when bill paying meant sitting down with a checkbook, a pen, and some stamps.  I’d write out checks and get them in the mail with enough time for them to get to their destination before the due date.  On rare occasions I would send a check that I didn’t have quite enough money to cover and hope that a deposit went through before the check was cashed (DON’T DO THIS!!!!!).  Sometimes there would be a mail failure and a check wouldn’t get there on time (or at all), leaving me on the phone with customer service representatives trying to sort it all out.


Today bill paying for me involves my computer (or my smart phone) and several auto-payments.  Several regular bills (my mortgage, my car payment, my car insurance) I have auto-debited from my checking account every month.  Several others (my cell phone, my online newspaper subscription, my Netflix account) I have billed right to my credit card.  The rest I pay online with my credit union’s online bill payment feature.  The funds move electronically in most cases, so I know that when I sit down tonight to schedule payment to my Visa card, the bill will be paid tomorrow.

As with everything, there are pros and cons to auto-debit and to online bill payment.  If you don’t have regular income, auto-debit can be a little scary as the creditor will attempt to deduct the money whether it’s in your account or not, and that could result in an overdraft for you.  But in most cases auto-debit is a win-win.  You never have to worry about taking action to make a payment, you know your payment will always be on time, and the creditor is happy because your payment will always be on time.  Some places (student loan servicers in particular) will even lower your interest rate on a debt if you sign up for auto-debit.

Online bill pay requires a little effort on your part to set up.  If you don’t enter your information correctly, your payment may end up in the wrong place.  And your bank may charge you for this service (though I encourage you to look around for a bank that doesn’t!).  But once you have everything set up, paying the monthly bills is a snap.  You sit down at the computer, enter the right amounts and desired payment dates next to the bills, and you’re done.  No checks.  No stamps.  No mail mishaps.

Paying bills is never anyone’s idea of a good time.  But it sure could be a lot worse!


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