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I'm thinking about signing up for my bank's online bill-pay service, but I'm concerned about putting someone in between me and my service providers. My questions:

  • Have you had any problems with bills not being paid?
  • If you had issues, were they addressed satisfactorily?
  • How much of a hassle is it to switch if you decide to switch banks or discontinue your use of online bill-pay?
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why not just set up direct debits to pay the bills? see en.wikipedia.org/wiki/Direct_debit –  Ian Sep 15 '10 at 9:25
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@Ian I've seen too many companies screw up billing to trust them with free access to my checking when ever they feel like it. –  SpecKK Sep 16 '10 at 20:47
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5 Answers 5

up vote 4 down vote accepted

Each bank builds or buys their own bill pay system, so answers are not universal (try your banks bill pay system out before fully transferring over, if I didn't like mine I'd get a new bank), but for your questions in order:

  1. All of my bills have been paid as scheduled, but I have had long term issues getting bills electronically delivered from one credit card company to my bank. I have to manually pay this bill every month, but it takes a few seconds to make the payment through the bill pay site, rather than the time it takes to procure checks, envelopes and stamps.
  2. I need to call my banks online support to fix the above issue, but I haven't yet, since it works well enough.
  3. All payments can be easily canceled. The hassle part of switching banks comes in re-entering all your accounts at the new bank and learning the user interface for their bill pay system. Some payment schedules might take time to register in their system, so you might need to snail mail a bill in between.

Other things to consider include:

  • Check your bank account at least twice a month to verify what payments have been made (this is just good general advice).

  • I use bill pay to automatically pay the minimum payment so I avoid forgetting to pay my credit card bill.

    • I go over the bill at least monthly to make sure all payments are authorized and correct, then manually issue full payment through the bill payment system.
  • I strongly recommend a push vs. pull method for bill pay; that is, pushing money from your bank account to pay bills, rather than allowing billers to pull money from your account. This limits the number of companies that you directly give your bank account information to, and makes it easier to hold onto your money when you dispute a mistake they made. It also puts all payment information in once central place so you can keep track of all payment schedules together.

    • Never use a paper check or electronic transfer to pay off a belligerent creditor.
    • After a cell phone provider hit me with inaccurate extra fees, I automatically pay cell bills with a credit card. That is one extra layer of defense to dispute charges through.
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+1 Great answer, I'd give +3 if I could: (a) automatically pay the minimum to avoid late fee, (b) push vs pull, (c) pay to credit card first. One question: what do you use to pay off a belligerent creditor? Bank check? –  bstpierre Sep 14 '10 at 1:32
    
Bank/cashier's/demand/draft checks can be obtained from your bank as well as money orders from grocery chains, etc. (your bank is more likely to waive the fee). They are very unreliable to accept due to increased fraud, but they offer a paper trail that cash won't (for fraud notes, see money.stackexchange.com/questions/3348/… ) –  SpecKK Sep 16 '10 at 20:42
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I've been using online billpay for years, at three different banks. Two were local (a bank and a credit union), and the other is ING Direct. I haven't had any problems with any of them that weren't self-inflicted (forgetting to enter the bill). The credit union's system is pretty clunky, but the other two are fine.

One thing to make sure of is to leave enough time for the bill to arrive, just like you would do if mailing a check. Just have the bill sent a week before its due, and you should be fine. I usually do this soon after I get the bill, so I don't forget about it. ING will actually receive bills from some companies automatically, if you wish. So all you need to do is go online and click pay, and it will know when the due date is and the amount to pay. For bills that have the same amount each month (mortgage, insurance premiums, etc.), you can set it up to pay automatically each month so you don't have to do anything.

Its a bit of a hassle moving banks, and reentering the account numbers, addresses, etc. Stopping a bill is as easy as clinking delete in the online system. My current setup is to have all my bills paid through ING, and my paycheck direct deposited. I can transfer money to/from my local bank in a couple of days if I have checks to deposit, or to use the local ATM.

I short, I would never go back to writing paper checks.

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Seconded. The inconveniences are rare and much less annoying than the constant ones with paper bills. –  Matthew Read Sep 13 '10 at 21:55
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SpecKK's answer is excellent, I've only got two things to add:

  1. When your creditors change your account number, make sure to update your online information. You're not sending back a coupon, so it's up to you to make sure it has the new number and gets posted to the correct account.

  2. If your bank supports it, give the creditors good labels/nicknames. If you have names that are similar, it's easy to send a payment to the wrong place -- this may not be easy to detect and is a hassle to straighten out.

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One thing I didn't see mentioned - my major bills are all electronic transfer, i.e. there is no check mailed. A bill due in 2 days can be set up now, and still paid the day after tomorrow. Try that with a check. There are smaller companies that are not done that way and a check mailed, but you state the due date not the mailing date. So the bank still has the obligation to get it there. This is how my particular bank works.

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Using the bank's bill pay always seemed like a hassle to me. There are lots of mistakes to be made by me that can result in late payments and not too many benefits other than some convenience, and being able to pay bills online for accounts that require paper payment. (Although the banking systems often screw up those payments) Plus, there is usually a fee associated with bill pay, at least to some extent.

I generally use the websites of my credit cards or other entities to pay bills.

Then again, maybe I'm a bit of a weirdo here... I don't see mailing a check 3 days ahead of the due date as a particular hassle.

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I happen to have my mortgage at the same bank where I have my checking, so the online billpay is free. You are not a weirdo (that I know) it wasn't so much that pulling out the checkbook was a hassle, this is just far easier. I can go online, load up the number for 10 bills in from of me, enter into check register and be done in far less time than writing and stamping those 10 checks. The time is saved as well as the cost of stamps. This adds up over time. –  JoeTaxpayer Sep 15 '10 at 10:59
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