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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:
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:
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 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.
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.
SpecKK's answer is excellent, I've only got two things to add:
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.
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.
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.
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.
•Have you had any problems with bills not being paid?
NO
•If you had issues, were they addressed satisfactorily?
Answer: A big issue that blindsided me: With my bank, the funds come out of my account right away, but the actual payment is done through a third-party service. On my bank's online site it appears that the payment has been made, but that does not necessarily mean that the intended recipient has cashed it. Looking online at my credit union's site is useless, because all I can tell is that the payment has been sent. The only way to verify payment is to contact the intended recipient. Or I may telephone the online bill pay representative at my bank/credit union, who has access to the third party service. If I do nothing, after 90 days, the check is void, at which time the third party service notifies the bank/credit union and the funds will eventually end up back in my account.
I learned this today, after a third-party paper check to a health care provider was returned to me via mail by the recipient (because insurance had already paid and I did not owe them anything). The money was in the hands of the third-party service, not in my account, nor that of my credit union nor the recipient. At first my credit union told me that I would have to contact the third-party service myself and work it out. I said "NO WAY" and the credit union did get the money back into account the same day.
This is a sweet deal for the third party, who has my money interest-free anywhere from a few days to three months. And risk-free as well, because the money goes directly from my account to the third party service.
Many people do not know that bank online bill paying services are not provided directly by the bank. Banks often "farm out" this task to third party providers of bill paying services. These services in turn may farm out the customer service function to agents in foreign countries. These customer service agents have access to your account number, social security number, and your balance. This means that people have your personal information in countries where you have no rights and where security is not good and where enemies of your nation can easily access that information.
