Have you ever been freaked out by a bathroom that was a little bit too automatic? Automatic bathrooms are one of my biggest pet peeves. Most people like to avoid touching germy bathroom surfaces, but when unreliable sensors prevent you from flushing the toilet or turning on the faucet, these automated processes can be a huge pain in the you-know-what. I’ve been driven to near-breakdowns when the paper towel wouldn’t dispense, and I’m sure you’ve felt the same way (Or you think I’m completely overreacting!).
There’s certainly a dark side to automated bathrooms, and it’s the same way with automatic bill pay. Like most people, I find automatic bill pay to be quite convenient, but it’s definitely not for everyone. Let’s take a look at the positive and negative aspects of using automatic bill pay to handle your finances.
- It’s convenient. Paper checks are outdated and time-consuming. Paying online is a lot easier, but it’s not too hard to miss payments when you’ve got separate websites for all of your bills, as well as usernames and passwords to remember. Once it’s set up, automatic bill pay is virtually effortless. You’ll feel secure knowing that payments will be made – on the due date – no matter what.
- No more late payments. Late fees are a huge bummer.If late fees aren’t reason enough for you to avoid late payments, you should knowthat missing your payment can lower your credit dramatically. You may not intend to be late on your bills, but the fact is, even the most conscientious consumer can make this mistake. Whether it’s a vacation, an illness, or just a memory lapse that gets in your way, automatic bill pay can squash late payments like an unwanted spider under your tennis shoe.
- You might get a discount. I’ve been offered discounts and avoided billing fees just for signing up for automatic bill pay. For instance, my phone company once decided to charge me $7 per month as a security fee since I didn’t have credit. This fee was avoided when I signed up to have payments automatically withdrawn from my bank account. In other words, automatic bill pay can be a money-saver as well as a time saver.
- Save the trees and some money. It’s expensive to mail paper checks. As of January 27, the price of a first-class stamp is a whopping 46 cents. By mailing ten checks a month, you’re spending $4.60 just to pay your bills. At that rate, you’re actually paying over $55 per year for stamps; that could probably pay the cable bill for a whole month!
- You could overdraw. Automatic bill pay is not going to do you any good if you don’t have sufficient funds in the bank. If you overdraft your bank account, you’ll most likely be stuck with a few bank fees. If the payment bounces instead, you’ll be paying late fees to the collector. In other words, automatic bill pay isn’t a smart option for the consumer who has trouble balancing a checkbook.
- Mistakes could go unnoticed. Companies aren’t perfect and billing mistakes sometimes happen. Chances are, if your bills are being paid automatically, you’re not very likely to be going over your billing statements with a fine-toothed comb. Therefore, you might not notice a mistake right away, or at all, which could cost you a few dollars.
- It’s easy to lose track. I recently realized that I only had a vague idea of how much my phone bill costs. I hadn’t looked at it in about a year. Automatic bill pay can sometimes turn you into a financial space cadet since it’s easy to avoid bad news by not staying up-to-date with your bills. You should be aware of where your money is going and how much each bill costs, which is harder to do when you don’t have looming due dates that force you to log on and check.
Automatic bill pay can help your credit and make it easier to pay your bills, but it’s not for everyone. If you have problems keeping enough money in your bank account to pay your bills or if you have trouble tracking your spending, automatic bill pay isn’t really a viable option. By evaluating your personal circumstances, you can decide if automatic bill pay is the right option for you.