Online Bill Pay

(MoneyWatch) 

Should I pay bills online?

by Jane Bryant Quinn

Online bill paying is a godsend if (like me!) you hate balancing your checkbook.

All your deposits and online payments show up on your computer screen when you access your account. That gives you a running daily tally of most of the money in your account. Occasionally an item you buy with a debit card might not register right away, so it's worth checking those receipts against the sums debited from your account. You also have to keep track of the few paper checks you might still write by hand. As long as you can keep a cash cushion in your account, however, online banking makes checkbook balancing obsolete.

Whew!

Online payments may also save you money. Some companies charge $1 to $5 a month for mailing paper bills. You avoid this fee if you arrange to have the bills paid automatically through your bank account.

Can you switch banks? Changing banks gets more complicated once you've established online bill-paying accounts. But don't hesitate if your bank has been giving poor service or hiking your fees. Some banks have "switch kits" to walk you through the procedures. An increasing number of banks will even handle the switch for you, to make it easier to move.

How about paying bills online through each company's individual Web site? Why would you bother? You'd have to click on several sites and remember a pile of passwords. When you pay through your bank, it's just one password, all the time.

How about letting utilities and other regular billers take what they're owed from your bank account automatically every month? Absolutely not. It there's an error, it takes a while to get your money back. If you cancel the payments, the companies may keep drawing on your account for several months more. Set up these automatic payments yourself, through your bank account online. That lets you stop payments at any time.

How about paying through a dedicated bill-paying service? No point. These services charge monthly fees, while your bank's service is usually free.

How safe is banking online? Plenty safe. Banks are extremely careful about their security systems. The breaches you hear about involve mostly credit or debit cards and corporate or government data, not bank data. Millions of people successfully bank online through traditional services and Internet banks. If a hacker gets into a bank system and steals your money, the bank will pay. If a fraudster steals your PIN and writes himself a giant check, you're liable for no more than $50, as long as you tell the bank right away.

Excerpted from Making the Most of Your Money Now by Jane Bryant Quinn

Copyright 1991, 1997, 2009, by Berrybrook Publishing, Inc. Reprinted by permission of Simon & Schuster, Inc

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