Bear in mind that companies have a big incentive to get you to pay their bills online. Companies spend about $18 billion a year printing and mailing bills and late notices. About 80 percent of the billing cost is wiped out when a customer switches to online payment.
Your bank also wants you to go online, because it's cheaper for them to make an electronic payment than to process a paper check.
The service allows consumers "to click, not lick" that is, to pay such bills as cable, telephone, utilities, baby sitters and credit card companies. The money is usually transferred directly and electronically to the payment recipient, from any account (checking, brokerage, savings, etc.). If the creditor is not set up to bill electronically, a check can be cut, and sent to them.
Users can log onto a bill payment service provider, enter the bills they want paid and the account the money should be taken from and then submit their request.
There are also person-to-person bill-paying services that allow users to send money to somebody else online. It basically saves you a trip to Western Union.
While many online bill payment providers offer a free trial period, the monthly fee for most services can range from $2.95 to $29.95 for 20 or more electronic payments a month, or $35.40 to $359.40 a year. Individuals need to weigh the number of bills they will pay online against the cost of postage and checks.
To attract users, the U.S. Postal Service is offering six months of free service. Some big billers, like AT&T, are attempting to encourage online payment by offering customer discounts.
Advantages of Internet bill paying:
- Bill payers never have to search for stamps or scramble to the post office to meet a payment-due date.
- Some services offer to post the billing statements electronically. An e-mail notification is sent when the bill is due, and guides the payer to a web page displaying a copy of the billing statement.
- You can pay bills anywhere you are. For someone who travels a lot, this can be very valuable.
- For people who have been hit with late fees for payments they believe were made on time, some sites guarantee that you will never be charged a late fee, if your payment was made at a specified time.
- Bill records are kept in one place. No more searching through files to find an old bill stub.
- Through e-mail confirmation, payers can find out when their bill arrived, instead of worrying about whether it got there through the reguar mail.
- Some companies don't have the technology to send bills online, even though the customers have the ability to pay electronically.
- For income-tax reasons, consumers still prefer to write checks for such things as charitable donations, so they have some sort of paper trail.
- Cost. If you are like most Americans and pay about 200 bills per year, this is very beneficial. If you send a few bills per month, the old-fashioned way might still be the best option.
A few possibilities:
- Quicken's Bill Manager: This is a special bill conversion service that allows you to view and pay all of your bills online. Bills are sent directly to the conversion service center, and are scanned and displayed for you online. This is a great answer for companies who don't have the technology to send you a bill electronically.
- PayPal: Good site for sending money to individuals, for such things as settling restaurant checks with friends, sending money to your children at college, etc. This is also great for paying for things bought at auction sites. Just enter the recipient's e-mail address and the amount you wish to send. You can pay with a credit card or checking account. The recipient gets an email that says "You've Got Cash!". Recipients can then collect their money by clicking a link in the e-mail that takes them to the PayPal site, where they can transfer the money to a checking account, request a check, or send the funds to someone else.
- The U.S. Postal Service: The Postal Service's eBillPay section now offers a free six-month trial that allows customers to view and pay their bills online. The service will also find out for you which companies can send you their bills online.
- Your bank: Check with your bank and see what they offer. Major banks like Citibank and Bank of America offer online services.
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