Josh Smith
Paying your bills online at a company’s website is probably one of the easiest ways to handle recurring bills like your cell phone, rent, and cable. But if you're handing over your bank account information it's only a matter of time before a billing error hits your bottom line.
Up until recently I paid my rent directly from my checking account, which went well until our apartment was sold to another company and the previous owner never stopped withdrawing rent from my account. The problem was compounded by the fact that the new company thought we had never paid and was ready to give us a large late fee. It was a hassle to say the least.
Things like my example above aren’t the only issue with handing over your account information, especially if we’re talking about your checking account. Think about it, if you give a merchant your checking account information and they overbill you, you'll be on the hook for overdraft fees and may have to wait quite a while for a refund.
Alas, there is in fact a better way to do online bill pay that gives you more control and still remains automated -- using online bill pay at your bank. Believe it or not, most banks these days offer bill pay as part of the standard customer experience—many even connect your account directly to your cable, phone and other monthly bill providers. This is to ensure that the correct amounts are paid on time each month. The best thing is that if the bill you need to pay isn't in their system, like rent for a small apartment complex, you can set up a recurring payment and the bank will write and mail a check on your behalf.
The whole process of setting up online bill pay at your bank is simple, and if you have your monthly bills in front of you it shouldn’t take more than 20 to 30 minutes to get you started.
So what’s the cost? Many banks and credit unions offer online bill pay for free with your checking account and include a good deal of payments. Other banks may charge a monthly fee of around $7 a month for the service--which is a bit pricey-- but if you pay a good number of bills each month it may be cheaper than buying stamps and it's certainly cheaper than an overdraft fee.
Another option is to use choose one credit card to pay your monthly bills and log into the account settings option on your bank’s website. From there you can simply arrange to pay off the balance in full every month. This protects you from overdraft fees because you'll have time to review the bill before money leaves your checking account.
Up until recently I paid my rent directly from my checking account, which went well until our apartment was sold to another company and the previous owner never stopped withdrawing rent from my account. The problem was compounded by the fact that the new company thought we had never paid and was ready to give us a large late fee. It was a hassle to say the least.
Things like my example above aren’t the only issue with handing over your account information, especially if we’re talking about your checking account. Think about it, if you give a merchant your checking account information and they overbill you, you'll be on the hook for overdraft fees and may have to wait quite a while for a refund.
Alas, there is in fact a better way to do online bill pay that gives you more control and still remains automated -- using online bill pay at your bank. Believe it or not, most banks these days offer bill pay as part of the standard customer experience—many even connect your account directly to your cable, phone and other monthly bill providers. This is to ensure that the correct amounts are paid on time each month. The best thing is that if the bill you need to pay isn't in their system, like rent for a small apartment complex, you can set up a recurring payment and the bank will write and mail a check on your behalf.
The whole process of setting up online bill pay at your bank is simple, and if you have your monthly bills in front of you it shouldn’t take more than 20 to 30 minutes to get you started.
So what’s the cost? Many banks and credit unions offer online bill pay for free with your checking account and include a good deal of payments. Other banks may charge a monthly fee of around $7 a month for the service--which is a bit pricey-- but if you pay a good number of bills each month it may be cheaper than buying stamps and it's certainly cheaper than an overdraft fee.
Another option is to use choose one credit card to pay your monthly bills and log into the account settings option on your bank’s website. From there you can simply arrange to pay off the balance in full every month. This protects you from overdraft fees because you'll have time to review the bill before money leaves your checking account.
By using your bank or a credit union to automate your online bill paying you can enjoy the pleasure of avoiding late penalties without having to worry about being double billed by your cable company and finding out that there's not enough left in your account to cover rent and groceries until after they've fixed the error… 8 to 14 business days later.
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