Paying your bills online or through automatic bill pay services is incredibly convenient. There are several benefits of using these options, but there are also some disadvantages. Everyone should be aware of the pitfalls that may ensue, so here are the pros and cons of online and automatic bill pay.
Pros
- Your bills are paid on time.
With automatic bill pay, no matter what happens, your bills will be paid on time (assuming you have the money in the bank). Mailing in a check or paying over the phone can lead to late or missed payments. If you set up automatic bill pay, then you’re much less likely to miss a payment. - You save time.
Nothing is worse than having to spend time on the phone to speak with customer accounts or having to go to the post office to mail a check. When you use online or automatic bill pay, you’re saving time that can be spent doing other things. You don’t even have to walk to the mailbox. - You help the environment.
Automatic and online bill pay help the environment. No more checks, no more statements (if you opt to go paperless), and no more forms. Everything is completed online. All you have to do is input your bank account or credit card information. - You can get credit card rewards.
Many credit cards now offer rewards for paying bills you’d have to pay anyway, such as water, gas, electric, and cable. These payments can accrue rewards points that can go toward new outfits or even air miles. You can collect these points by spending money you were already going to spend by paying your bill. - You’ll save money.
While you’re saving time, why not save money? You’ll no longer have to spend money on postage, checks, envelopes, and even late fees when the mail runs late.
Cons
- It's easy to lose track of your money.
Paying online is easy, but you can easily lose track of your money with automatic bill pay. When a company drafts payments from your bank account, you may only notice after the payment has been drafted. Keeping track of your finances just becomes a little harder. - Mistakes happen.
It’s rare, but mistakes can happen. Sometimes bills can be withdrawn from your account more than once in a month—or double the amount. While it only happens once in a blue moon, you’ll still have to spend time calling the company to get your money back. - Overdrafts can happen.
Since you may forget about the payment, there is a better chance of account overdrafts. On top of the bill payment, you’ll also incur overdraft fees from your bank and possible fees from the billing company or merchant. - Your payment could be rejected.
Whether it’s because you don’t have enough funds or you input your bank account information incorrectly, sometimes your payment may be rejected by your bank. The only way you’ll notice is a few days later when the payment deduction hasn't occurred. This problem can result in all kinds of fees. - There are security risks.
While most aspects of online and automatic bill pay are secure, there are situations where your information may be stolen. Computers can be infected with unsafe programs, called viruses or malware, which can relay your personal and financial information to someone else. It can take several hours or days to fix the problems that result from these security breaks, and sometimes you end up having to open a new bank account to protect your money.
