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February 25, 2013

Paying Your Bills Online Is A Win/Win

I know a few people who still insist on paying their bills the old fashioned way.  They write that monthly check for the mortgage, car payment and numerous other payments that they have.  Even after I tell them the benefits of paying online, they still prefer to pay their bills the old fashioned way.  If only they would listen.  They would save both time and money.
I have been paying my bills online now for almost 15 years. It is faster (you can set up recurring payments. Just be sure that the money is in your account to cover the payment on the day you set it to be paid) and less expensive (no stamps and you don’t have to buy checks nearly as often).
It also is safe to pay your bills online. Yes an account can be hacked but there is always the risk of mail theft when paying bills by mail. If a payee says they never received payment you readily research your account on the bank’s website to see if the payment was made and to whom. I have had an instance or two where I got a letter saying that payment was not made and it was.  What I found out was that the name of the payee or the address was not correct.  After corresponding with the payee, the issues were resolved.
In paying my bills online, I also am helping the environment and contributing to going green. Online payments save paper. Not just from the written checks but envelopes as well.  Companies have less envelopes to open so their costs get reduced. This truly is a win/win for all.
Certain recurring monthly payments are allowed to be made by credit card. You can take advantage of rebates and  my credit card happens to offer me a 1% rebate on all purchases.  Not much but every little bit helps. If I could pay my cable bill using my credit card I certainly would do so. It would also be 1 less payment to set up every month as it is now included with my other credit card purchases.
Banks are happier as well.  Online payments reduce their processing fees. Handling it electronically is also simpler for them and merchants like it because of this as well.  Less envelopes to open. Receive their money quicker.  Paying by mail vs paying electronically at the same time.  The merchant will receive the electronic payment quicker.
I do not recommend using online payments from service providers such as electric companies, credit card companies, etc. If they make an error it can adversely affect your credit rating and per your agreement with them it may be difficult to hold them accountable. Also if there is an error it can take a while to get your money back. I prefer paying bills online through my bank.

Paying by check still has its uses. It is not recommended that you pay federal tax bills through your online bank.  My bank specifically says, “The Online Bill Payment service should NOT be used to pay your local, state or federal taxes.”  When you pay online, the money is deducted from your checking account NOT when the payee cashes the check but when you tell the bank to pay the bill.  You no longer have a “float”.  How many of us will give a birthday gift of $50 by doing it through our online account?  We probably will include a check inside a birthday card. The same goes for weddings.  
On the minus side, it is not as easy to switch banks. If you do switch banks you need to make sure all pending and recurring payments are cleared. 
If you have further questions about paying bills online, or other technology questions I can be contacted at (917) 572-3468 or email me at .
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