Thursday, 19 September 2019

What Is a Bill Pay Service?

What Is a Bill Pay Service?
27 Jan
10:59
Pay bills using a bill pay service
Source: iStock

Online bill pay services are growing increasingly popular with consumers. Rather than writing and mailing paper checks, customers can pay bills from their mobile device or tablet in one convenient place, schedule automatic payments for recurring bills, and depending on the service, also make next-day or same-day payments.  All of these features can make for a seamless, easier and more convenient way to pay bills each month.

Tips on using a bill pay service

Many banks and credit unions offer online bill services for free. And many other companies, such as Paytrust, Quicken Bill Pay, Mint Bills and MyCheckFree, also provide these services.

An online bill pay service can be beneficial for a number of reasons. For starters, they help you to make payments on time. And paying on time avoids late fees and potential negative marks on your credit report for missed payments. In fact, your payment history is an important factor that contributes to your overall credit score.

Online bill pay services can also record your payment history, so you know how much you’re spending in each account each month. This can be particularly helpful for budgeting and predicting what some bills — like gas, electric and fuel — will be for particular months of the year, as you’ll be able to see during which months your home uses the most energy. Being able to view your payment history may also help you avoid overdraft fees in the future.

Furthermore, bill pay services are environmentally friendly, as many consumers opt out of receiving paper statements each month. These types of services also can help save time and money – online payments reach merchants faster and saves you a trip to post office to buy stamps.

Setting up online bill pay is easy. Carefully choose an online service provider and then collect your bills, including account numbers and payment mailing addresses (or at least zip codes). Enter each merchant’s information in the appropriate field on the bill service provider’s website. Choose a date on which to send each payment, and select whether you want to make it a recurring or one-time payment.

What to consider before using a bill pay service

Although online bill pay services offer many benefits, there are also some potential drawbacks. Some consumers may be concerned about cybersecurity. However, using complex passwords, changing them regularly and using multi-factor authentication can help protect your transactions. In fact, many believe that the encryption used by financial institutions during bill pay service transactions is a safer alternative to checks that sit in a mailbox and risk being stolen or lost.

Another potential drawback of a bill pay service is that typically they require customers to pay bills from a checking account. If you want to pay bills with a credit card to earn rewards, points or travel miles, then you might prefer to contact your online provider to authorize them to charge a credit card each month instead. This is not an option for every online bill pay company, but many will accommodate it.

In sum, online bill pay services could help reduce the amount of time and effort spent on paying bills through snail mail each month. It could also prevent you from missing a payment, which in turn could help avoid late fees and maintain a favorable credit score.

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Renee Morad
Renee Morad |

Renee Morad is a writer at MagnifyMoney. You can email Renee here

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Source: https://www.magnifymoney.com/blog/banking/bill-pay-service/

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