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It is comforting to know that your bills will be paid each month with hardly any effort on your part.
Automatic bills payment has several advantages:
- Your credit score might improve. You might find that paying via automatic bills payment will improve your credit scores after a few months. With automatic bills payment you will not pay your bills late. Of course you will need to keep your checking account adequately funded. One of the reasons you can have a lowered credit score is because of late payments.
- Save money. If you have ever paid your bills late, you will find that there are late charges so paying on automatic will eliminate that. A result of paying electronically is that you will be able to spend less money on envelopes, stamps, and checks.
- Save time. You will spend less time and energy worrying about paying your bills if you have it automated. You will not need to sit down and make time for bill payment activities. However, this is not an excuse to put your bills out of your mind completely but automatic bills payment does save time.
- Environment friendly. No need for paper bills, checks, or envelopes. In this way you can save trees and have less impact on our environment. Also the mail couriers will not spend fuel to deliver your bills or payments as well.
- Low risk of identity theft. Identity theft continues to be a significant issue worldwide. There is always a risk when you send your account numbers and credit card numbers via snail mail with thieves just waiting for the opportunity to get hold of your accounts or credit card numbers. Doing business online is not foolproof, but there are more efforts made to keep your financial information safe.
If there are advantages than there are also disadvantages. We urge you to consider both prior to making a final decision. Here are the disadvantages:
- It can be challenging to stop payments. Automatic bills payment set up with your bank are usually easy to stop. However, if you set up with a credit card or with the merchant this can be very challenging to stop. We suggest that you investigate the process for ceasing payments. In many cases, written notification is required.
- Credit card debt. Make sure that you pay your credit card balance in full and on time each month if you use your credit card for automatic bills payment. It is easy and possible to rack up a lot of debt quickly with fees and charges.
- Higher costs. Many automatic bills payment services are free or very inexpensive. However, some do charge high fees. There are also merchants you charge high fees if you want to pay your bill automatically. Make sure that the costs are reasonable.
- Lack of awareness. Know how much your bills are each month and make sure that you do have enough money in your account to cover your bills. Since bills are paid automatically, it is easier to forget to look into how much your bills are or be aware of your account balance. So in a regular basis review your bills and your bank account balance.
There are a few disadvantages with automatic bills payment, but the advantages is reason enough for most people to pay bills automatically. The time and money savings are a significant advantage over paying your bills manually. Spend a couple of minutes each week monitoring your bills and the balance of your payment vehicle. In return, the automatic bills payment can save time, money and even improve your credit score. Consider adding this useful tool to your financial arsenal.