How to Pay Your Bills Online

Pay bills online to simplify your finances and avoid missed payments

Woman sitting in front of laptop using a calculator to pay her bills online
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Paying your bills online can free up time, save you money, and prevent you from forgetting important payments. You have several options when it comes to paying your bills online.

Depending on both your bank and the company you are paying, you may use a combination of the different online bill pay options.

Divide Your Bills

To set up online bill pay, start by gathering all of your bills and dividing them into three piles:

  1. Bills that are the same amount each month, such as loan payments or the cable bill
  2. Regular bills that are for different amounts each month, such as the power bill or credit card bill
  3. Bills that you do not pay regularly with variable amounts

Set Up Automatic Payments

Set up automatic payments for all the bills that are a set amount each month.

Most companies offer the option of signing up for an automatic draft or scheduled payment. It is best to do an automatic draft only with bills that are consistently the same each month.

Some companies will offer a small discount if you set up automatic bill pay.

You usually can set up recurring payments through the utility, rental, or loan company. Some companies charge a processing fee for online payments.

Some bills that you can set to pay automatically include:

Use Your Bank's Payment Service

You can also schedule payments through your bank, which may help you avoid processing fees.

To set up a recurring payment with your banking account, you need to visit the Bill Pay section of your online banking page. You will set up a profile for the bill that you want to pay online.

This profile will include your account number, the account where the payment will be sent, and the company’s name. Then you will select the option to set up a recurring payment and set a monthly date for the payment to come out of your account.

Some banks may limit the number of online payments you can make without a fee, and smaller banks may not have the same services as larger banks. If you cannot set up bill payments from your bank's online portal, you may need to call customer service or visit a branch in person.

Choose Bills to Pay Individually

You can still pay bills with variable amounts online, though you cannot set up a regular transfer from your account if you don't know what the amount will be.

To make an online payment, you will need to set up a profile to pay the bill in your bank's online portal. Then when the time comes to make a payment, you will select the one-time payment option, click on the profile of the bill you are paying, and enter in the amount.

Be sure to record the transaction number the bank gives you as a receipt. Paying your bills directly to the company gives you a tracking number if there are issues.

You can use this option for bills like:

  • Utility bills
  • Credit card bills

By paying online instead of writing a check, your payment is processed quickly. You can avoid accidentally spending the money for the payment before a check is cleared.

Plan for Annual Bills

The irregular bills that you receive may be handled differently. These would include bills like:

  • Tag and registration renewal for your car
  • Variable insurance payments
  • Tax payments

For these bills, it is often easiest to visit the company’s website and pay the bill online. You can usually do this with either a credit card, debit card, or bank transfer.

You may also be able to use a service like PayPal if you want to avoid giving the company your banking information while paying bills online.

Generally, there is not a processing fee to pay the bill online if it is an irregular bill.

Tips for Paying Bills Online

  • Schedule carefully: Schedule payments a few days before the payment is due. This ensures the payment will be on time if there is a holiday or weekend. It also gives you time to make corrections if the payment does not go through.
  • Set reminders: Avoid overspending and late payment fees by setting reminders in your budgeting software or on your phone. These will let you know a payment should have been drafted from your account or remind you to make a payment.
  • Verify: Check regularly to make sure that your automatic bills are being paid on time, that the payment has not gone up, and that the account number hasn’t changed.