Online bill pay is fast becoming a popular means of payment among people who want to practice good debt management skills, and save on both time and money in the process.
What exactly is online bill pay?
Generally, it is a payment method that lets an individual carry out payment instructions to creditors electronically through a computer program. This can virtually get rid of errors, making it easier to manage debt. In addition, it is faster than mailing checks.
Online bill payment methods come in two basic categories: those being offered via a bank, and those offered via a service provider- like a credit card or phone company.
In general, online bill pay is designed to be fast and simple to use. Majority of major banking institutions, as well as businesses, provide this service without any charge. Individuals can choose to manually enter their payments every month, or arrange for an automatic withdrawal from their account. Automatic withdrawal allows them to set up their payments before their due date without worrying about giving manual instructions to make a monthly payment. The creditor will transfer funds straight from the bank, and enter these funds into their account with no action needed whatsoever.
Advantages of Choosing Online Bill Pay
The following information will help you consider the different advantages of using online bill pay:
Individuals can save on time when using the online bill pay platform. Instead of writing out checks, wetting stamps and filing lots of papers, they can set up an online account to get rid of all these steps. It will also be easier and faster to manage their debt.
When they need to go over past bills, they do not have to waste time in looking for them – because all their account information can be seen in one centralized location.
They can save on the stamping costs, which can add up. The average household gets 15 bills every month, which could amount to $70 a year in just postage costs.
They can avoid late payment fees that are incurred every time a payment is received after the due date. Missed payments could lead to the following:
- Increase in interest rates;
- Late payment charges and over limit fees.
When the payment is past due, their account could possibly go to collection status.
What is a more convenient solution to managing debt? Individuals could create their own automatic online bill account, so they can set up recurring payments that are to be regularly withdrawn from their account. This decreases the chance of late /lost payments, saving time in the process.
When they find out that one of their bills is due for payment on the next day, the best way to make sure that their payment will be posted on time is through online bill pay.