I’m a fan of automatic online bill payments. Having a payment automatically deducted from my account every month is convenient and environmentally friendly. No paper statements to wade through, no need to remember a due date, and no checks to write. However, automatic bill payment isn’t the best choice for every bill. Many of my service providers give me the choice between automatic, recurring billing and “manual” online bill payment where I give the authorization for the payment each month. For many of my bills, I choose the latter. Why would I choose to enter the payment each month when the convenience of recurring billing is available to me? Because there are certain bills and providers that cannot be trusted to handle automatic bill payment correctly and it’s a heck of a lot easier if I catch the mistakes and tricks ahead of time rather than dealing with late fees and charge reversals later.
The bills that are good candidates for automatic online bill payment are the ones with charges and due dates that never fluctuate. A mortgage, for example, is always the same payment, due on the same date, no matter what. A security system or cable TV are other examples. These charges never change or, if they do, you are given ample notice. The due dates are also not variable. You do not run the risk of incurring late fees because of a changed due date and you don’t have to worry that there will be charges you don’t understand on the bill.
In my case, the providers that I allow to automatically deduct from my account have earned my trust through a long history of correct billing and payment crediting. I don’t mind having them pull money from my account every month because I have a high degree of certainty that the bill will be correct and the payment applied correctly.
The bills that should be paid manually every month are those with ever changing amounts, due dates that can change, and/or providers that you don’t trust to pull money from your account every month. Credit cards are one example of a provider that I would never put on automatic bill payment. They are known for suddenly changing your due date and, if you’ve got automatic bill payment set up and you don’t notice this trick, you’ll be hit with late fees when you miss your payment. Credit card charges should also be reviewed every month before the money is pulled to make certain all the charges are legitimate.
I also don’t choose automatic payment for my utilities or telephone bills. The utility bill can vary month to month and I prefer to review the bill before blindly having a payment made. This came in handy one month when I got a huge electric bill, only to discover that they read the meter incorrectly. I was able to appeal the bill before making payment, saving me the headache of trying to appeal a bill after the provider already had the money. In the case of the phone bill, I simply don’t trust my phone provider to handle automatic bill pay. For years we have had billing issues with them and I prefer now to manually pay the bill so I don’t have to worry about them taking the wrong amount or taking it on the wrong date. They simply haven’t earned the trust required for me to give them unfettered access to my bank account.
Automatic bill payment is a great thing, but use it wisely. If you have a bill that remains the same month to month, you know they aren’t going to suddenly change your due date, and you trust them to handle the payment correctly it’s a very convenient way to pay. However, bills that fluctuate, are subject to trickery (like credit cards), or providers that cannot be trusted to handle the payment correctly should be paid manually. Manual payment gives you a change to review the charges and to authorize a specific payment amount. You’ll also get a receipt for your payment in case you need to dispute something later, something that isn’t always provided with automatic payment. The convenience of automatic bill payment can quickly become a headache if you put all your bills on auto-pay and rely on your provider to do everything correctly. So use auto-pay, but only when you know it’s going to work in your favor.