Have you ever struggled with making your bill payments on time? Then an online bill pay is the perfect financial tool for you. Making your monthly payments online saves you both money and time. However, as useful as automatic bill payment is, it is not without flaws.
Before you decide to pay all of your bills online, you should learn everything there is to know about this service. So, here are the advantages and disadvantages of online bill payment.
What Are The Risks of Paying Bills Online?
Online bill payments are mainly risk-free. This is because financial institutions, lenders, and credit card companies do all possible to secure transactions with security protocols such as encryption, security layers, automated sign-off, and usernames and passwords.
However, it isn’t a bad idea to take some extra precautions. Here are some things to remember when paying invoices through your financial institution or the payee’s payment site.
- Avoid making payments with your debit card. Credit cards provide better protection if someone obtains your card’s data and uses it to commit fraud.
- Ensure that you are using a secure connection. You should never use public Wi-Fi to pay your bills or conduct other financial transactions.
- Always double-check your online bill payment transactions to make sure that the payment went through correctly.
What Are the Advantages and Disadvantages of Online Bill Pay?
Let’s look at some of the advantages and disadvantages of online bill pay.
Advantages
- It’s Free
Online bill pay is free, meaning you’ll spend less time looking for your stamp book and fewer visits to the post office. Although it may not seem like a big thing, it does add up in the long run.
- Consolidated
It makes bill paying more manageable and gives you the most comprehensive picture of your finances. Because it’s linked directly to your bank, you’ll be able to see when you need to transfer funds for payment. It also gives you the chance to keep track of your outstanding loan.
- Automated
With your recurring payments in place, you won’t have to worry about missing a payment, or forgetting to pay your bill. In addition, this makes it easier for vendors to receive their payments on time.
- It can improve your credit score.
Payment history makes up to 35% of your FICO credit score. Late payments, therefore, can drop your score or leave it in the poor, or fair categories. On the other hand, regular, on-time payments will undoubtedly enhance your credit score, allowing you to qualify for better financing arrangements and credit cards.
Disadvantages
- It’s not always fast:
Although most platforms accept bill pay, some merchants are not fans of online bill pay. Many landlords still prefer and even insist on paper checks. If your regular payee or merchant refuses to accept electronic payments, you can send them a check via your bank or credit union.
- It can lead to an overdrawn account:
In some cases, automatic payments can result in unanticipated expenses. For example, you could be charged penalties if you don’t have enough money in your bank account to cover a payment. As a result, always ensure that you have enough money in your bank account to satisfy your obligations.
- It doesn’t automatically cover changes to bill amount:
If your bill varies each month, but your automatic payments are set to a fixed amount, you may find yourself in danger of not being able to pay off your debt. If you ignore the bill’s fluctuation, you could be charged late fines.
- Potential Cost.
Some businesses will charge you a fee, which is a deceptive ploy because automatic payments save them money. Don’t be fooled by this cost. If your biller insists on charging you, pay them using a paper check.
- Losing Track.
It’s easy to lose track of what’s due each month and when with automated payment plans. You might want to mark the payment date on your calendar as a precaution. Then, check online to ensure your payments went through to prevent being held accountable.
Is Bill Pay Good To Use?
Totally, they are quite convenient after all. To pay bills online, enter your bank account information. Online bill pay lets you schedule bill payments, balance books, and invoices in real-time.
First, you’ll need to decide how you wish to complete the payment, either through debit cards, bank accounts, and credit cards. Next, choose if you’ll be paying the vendor through a check or bank transfer.
What Are the Benefits of Bill Pay?
There are several advantages to paying bills online. Here are some things to think about:
- It is environmentally friendly—Billing statements, paper checks, and envelopes are all eliminated with electronic payments. Simply sign up for online payments across all of your accounts.
- Online bill pay is highly secure—Your transactions are very safe because online bill payment solutions use various security methods, such as encryption techniques and security layers, to safeguard each transaction.
- A matter of convenience—Making online payments through your credit union or bank means you no longer have to worry about forgetting all the different logins and passwords for all the various websites related to your bills. In addition, you can schedule payments with certain providers, meaning the payment will be automatically approved on your due date.
Need help setting up an online bill pay? Why not take advantage of Capital Pacific Loans’ financial services, such as payday loans and more.
