Paying bills can be tedious and time-consuming, but there are things you can do to make it easier, starting with setting up automated payments. Putting your recurring payments on autopilot can make paying your bills less of a headache and free up time so you can focus on managing other aspects of your financial life. 카지노사이트
If you’re not currently using automatic bill payment, you may be wondering what all the fuss is about. Here’s a closer look at what automated payments are, how they work and the pros and cons of incorporating them into your financial life.
What Is an Automated Payment?
An automated payment is essentially what it sounds like: a payment that’s automatically sent to one of your billers from your bank account or credit card account. You can authorize an automatic bill payment to be made using your debit card, credit card, checking account, savings account or money market account. The amount due for the payment is collected automatically by the biller according to your payment schedule.
Automated payments can be used to pay different types of bills. For example, you may be able to use automatic bill payments to pay your:
Cell phone bill
Credit card bills
Auto loan payment
Student loan payments
Keep in mind that some billers may not allow for automated payments. For example, say you pay a lawn care company to cut your grass once a month. If it’s a small local business, they might not be equipped to accept automated payments. When a biller doesn’t accept recurring payments, you may have to set up online bill payments manually, pay by phone or mail a paper check. 안전한카지노사이트
How Does Automatic Bill Payment Work?
Automated payments can be processed in one of two ways, depending on how you pay.
First, you can make automated payments via ACH transactions. ACH stands for Automated Clearing House, and it refers to a form of electronic funds transfer, or EFT, to or from a bank account.
When you set up automatic bill payment using your bank or credit union’s online bill payment system, for example, your biller gets paid via an ACH transfer. You tell the bank or credit union how much to pay and when to pay it each month. The bank then authorizes that amount to be deducted from your selected account each month and transferred to the company you need to pay.
The second way to set up automated payments is by using your credit card. For instance, if you need to pay your Netflix or Hulu subscription each month, you could set up an automatic payment allowing those fees to be charged to your credit card.
There are three ways to set up automatic bill payment, depending on which biller you want to pay. You can schedule automated payments:
Through your bank’s online bill payment service
Directly with the biller
Using your credit card
The process works slightly differently for all three.
With your bank, for example, you’d have to log on to your online or mobile banking app and tell the bank which biller to pay, how much to pay, when to make the payment and which account the money should be deducted from. If you choose instead to pay the bill directly to the biller, you would provide the biller with your bank account information (the routing and account numbers) so the money can be drafted automatically on the bill’s due date.
For automatic payments made with a credit card, you would give the biller your credit card information, including the card number, expiration date and CVV. The biller would then process a charge against your credit card for the amount due each month. Then, instead of making a payment to the biller, you would make a payment to your credit card company to apply to your balance.
Automated Payments in Action
If you’re still not clear on how automatic payments for bills work, here’s an example.
Say you have student loans and your student loan servicer offers an interest rate discount when you set up automatic bill payments. Because you want to get your loans paid off as quickly as possible and save a little money on interest while you’re at it, you decide to sign up.
To do so, you’d need to log in to your student loan account through your loan servicer’s website. From there, you would navigate to your payment options menu and select automatic payments. You would then plug in your payment information. If you’re paying with your bank account, you’d need to give your loan servicer both your account number and your bank’s routing number. Your payments would then be deducted from your account each month according to the due date set by your loan servicer. And, in the meantime, you get a discount on your interest rate.
Pros and Cons of Automatic Bill Payment
Automating bill payments has both advantages and disadvantages. Looking at both sides can help you decide if putting your bills on autopilot is the right move for you.
Setting up automated payments using a bank account or credit card isn’t difficult to do.
You can save time, since you don’t have to manually pay bills or write checks each month.
Automated payments may save you some money if they mean you’re ordering paper checks or money orders from your bank less often.
You can avoid potential damage to your credit score from late or missed payments when bill payments are automatically made by the due date. 카지노사이트 추천
Automatic bill payment also can help you avoid costly late fees and penalties.
Once you get in the habit of making bill payments automatically, it may become easier to manage your budget and spending, since you know exactly when money is coming out of your account.
Automating payments could put you at risk of overdrafting your account if you’re not keeping an eye on your balances.
Having an automatic payment returned for nonsufficient funds could lead to steep fees.
Putting recurring payments on autopilot may encourage you to become more hands-off with your money, which means bills or overspending could slip through the cracks.
Not every biller may be able to accept automatic bill payment.
If you’re paying using your credit card or debit card, you’ll need to remember to update your information when the card expires; otherwise, your automatic payment may not be processed.
Forgetting about an automatic bill payment you’ve put in place means you could continue to be charged for services that you no longer use.
If you want to stop an automated payment you’ve set up, you have the right to do so. You can contact the biller first if you’ve set up automatic payments directly.
If you set up the automatic bill payment through your bank or credit union’s online bill pay system, you’ll have to log in to your online or mobile banking to cancel them. Once you cancel an automatic payment made with your bank account or credit card, it’s important to continue monitoring your account activity to make sure no new payments are processed.
When Would It Not Make Sense to Automate Bill Payments?
While automated payments can make your financial life easier in many ways, they aren’t always a perfect fit for every situation. For example, you may not be keen on the idea of money being deducted from your checking account automatically if:
You’re self-employed and have irregular income each month.
You don’t always keep a cash buffer in your bank account to cover unexpected expenses.
You’ve lost your job or are looking for work and don’t have a steady paycheck.
You struggle with keeping track of spending and budgeting.
Making an automatic bill payment to a credit card also can be problematic if you don’t pay your credit card bill in full each month. Scheduling recurring payments for streaming services, gym memberships or utility bills may not seem like a big deal. But those payments can quickly add up to a sizable balance on your card if you’re only paying the minimum due each month. Once you add the interest charges in, the convenience of the automated payments gets wiped out by the extra cost.
How to Manage Your Automatic Bill Payment
If you’re ready to use automated payments to make your financial life easier, there are a few things to keep in mind. These tips can help you make the most of automatic bill pay:
Set up a bill payment calendar or use payment reminders so you’re aware of when bills are due to be paid.
Keep a list of your bills that are paid using automatic payments and the ones that are not.
Set up banking alerts to notify you when your balance is getting low to help avoid the potential for overdrafts when an automatic bill payment is processed.
Create alerts for your credit cards to notify you when a payment is charged to your card.
Log in to your online or mobile banking at least once a week to check your balance and review your account for any suspicious payment activity, and then do the same for your credit cards.
Remember to update your debit or credit card information for your automatic bill payment when you’re issued a new card because the old one has expired or been lost or stolen.
Automating your recurring payments can be a good way to simplify and organize your finances. Remember, however, that you still need to review your budget and keep tabs on your spending to maintain good financial health.