If you struggle to pay your bills on time or can’t find the time to deal with your finances, auto bill paying is one possible solution. One of the great benefits of online banking is auto bill paying. Your bills are paid automatically on a preset date each month. A checking / current account or credit card can be used as the payment source.
It’s comforting to know your bills will be handled each month with a minimal amount of effort on your part.
Auto bill paying advantages:
1. There’s a lower risk of identity theft.
Identity theft continues to be a significant issue nationwide. Sending snail mail with your account numbers and credit card numbers available to credit thieves is always a risk. While taking care of business online isn’t foolproof, there is far more effort made to keep your financial information safe.
2. You’ll save money.
Paying your bills on time means few late charges. It also results in less money spent on checks, envelopes, and stamps. How many times have you been unable to find a stamp at home?
3. Your credit score might improve.
Many people find that their credit scores improve after a few months of paying bills automatically. Late payments should be a thing of the past, provided you keep your checking / current account funded adequately. Late payments are a primary cause of lowered credit scores.
4. Auto bill paying saves time.
Though it’s not an excuse to put your bills out of your mind completely, you’ll spend less time and energy worrying about paying your bills. You won’t need to sit down and make time for bill paying activities.
5. It benefits the environment.
No more paper bills, checks, or envelopes. You’ll have less impact on the environment and save a few trees. The mail carrier won’t be burning vehicle fuel to deliver your payments, either.
There are many advantages to paying your bills automatically. Unfortunately, there are also a few disadvantages, too. Consider both before making a final decision.
Auto bill paying disadvantages:
1. Excessive credit card debt.
If you’re using a credit card as your auto payment vehicle, it’s possible to rack up a lot of debt quickly. Be sure to keep your eye on your balance and pay it in full each month.
2. It can be challenging to stop payments.
Automatic payments set up with your bank are usually easy to stop. However, automatic payments set up with a credit card or with the merchant can be very challenging to stop. Be sure to investigate the process for ceasing payments. In many cases, written notification is required.
3. A lack of awareness.
Do you know how much your bills are each month? Can you be certain that you have enough money in your account to cover the bill? When your bills are paid automatically, there is the potential to lose awareness. Review your bills and your bank account balance regularly.
4. The costs can be higher.
Most auto bill paying services are free or very inexpensive. However, some do charge high fees. Some merchants also charge high fees if you want to pay your bills automatically. Be sure the costs are reasonable.
There are a few disadvantages with auto bill paying, but the benefits outweigh the risks for most. The time and money savings are a significant advantage over paying your bills manually.
It’s important to maintain awareness of your bills and the balance of your payment vehicle. Spend a couple of minutes each week monitoring the situation.
Auto bill paying can save time, money, and improve your credit score. Consider adding this useful tool to your financial tool belt.