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A close cousin to electronic account payment is automatic
charging of recurring bills. If you're comfortable managing credit
card debt, then using your plastic this way is something to consider.
Credit card companies are actively soliciting companies
who will let their customers pay accounts electronically via plastic.
Even landlords and property management firms are being approached.
To make this option more attractive, many credit card issuers recommend
that billers not tack on fees for electronic bill paying, but sometimes
they do, says Diana Knox, senior vice president at Visa USA.
"In addition to credit, we also offer other card
payments, such as debit," says Knox. So electronic payments
can be set up with a variety of card options.
Calculating all the costs
Advocates of electronic bill payment often tout the consumer savings.
It's true that you'll no longer be buying stamps and
you might save a bit more because you'll order checks less frequently.
Plus, say fans of the system, it's easier to avoid late charges
with electronic payments.
Trent Horne is a Bank of America customer in Atlanta
and pays no fee to pay his bills online. In addition, he says he
saves about $5 to $10 each month in postage alone.
But make sure you really are coming out ahead. Is
the service free or will the monthly service charge eat up any savings?
Read the fine print of any option to make sure you know the fee
schedule, both recurring and incidental. And stay on top of any
e-payment system to ensure that you aren't mistakenly charged for
the service.
If you opt to use a credit card to automatically pay
bills, the upfront costs generally are minimal or nonexistent. But
if you carry a balance on the card, interest charges erase any savings
the process might have afforded.
And don't forget to factor in the cost of convenience.
There's no doubt about it, paying bills online will
save you time. Linda Snyder, a Pennsylvania State Employee Credit
Union account holder, says she saves two to three hours a month
by paying bills electronically.
Utt, the woman who pays a monthly fee to pay bills
online, doesn't mind the cost because it has allowed her to become
a lot more organized. When she wrote checks manually, she says she
tended to put bills in a file and then forget about them. The late
charges added up.
"I'd end up setting them aside and paying them
late because I'd forget about them," Utt says. "That doesn't
happen now."
Speed and security concerns
With online payments, procrastinators or forgetful bill payers have
more of a cushion.
The actual amount of time it takes a transaction to
go through depends on the individual bill paying site and how it's
automated, but all are generally faster than dropping a check in
the mail, especially if the billing center is not local.
Two to three days is the norm, whether you submit
the payment on a business day or on the weekend. Industry members
say that transaction time eventually will be same-day. Check with
the individual site as to when you can expect your payment to be
posted.
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