Online Bill Pay

Man making credit card purchase online
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Online bill pay is defined as an electronic payment service that allows you to set up a secure online account to make one-time or recurring bill payments. This can be a convenient way to pay bills quickly and on time. The source of funds for the payments is usually a checking account, but some bill pay services also work with credit cards. All bills and transactions are accessed on the bill pay website.

Below are some tips for choosing an online bill pay service.

The Cost of Online Bill Pay Services

There are some very good free online bill payment services, though they typically don't come with many special features. If you want more of these features, such as the ability to view several months' worth of bills online, you may prefer to use an online bill pay provider that charges a monthly fee. This cost is worth it for most people, who find they save money by eliminating the expenses associated with postage and purchasing checks. Alternatively, you may have access to free online bill pay services through one of the financial institutions you already use. Find out whether any of them offer online banking. For some suggestions, read our article on The Best Online Bill Pay Services, which surveys the top free and paid options.

Electronic Funds Transfer Vs. Mailing a Check

The payment can be sent from your account in two ways: electronic funds transfer or a paper check.

It's best to set up payments with companies that will accept the payments electronically, as this creates a seamless online payment arc. However, online bill pay services can cut and mail a check when electronic payments are not accepted. Be sure to allow extra time and plan ahead (usually five business days) for the check to be cut and mailed.

Is Online Bill Pay Safe?

The answer is yes, online bill pay is safe. Transactions and other personal and financial information are heavily encrypted for the customer's safety. To make using these services even safer, follow these tips for paying bills online. For example, a good rule of thumb is never to click payment links from an email. Always log on to the online bill pay service directly through a web browser, using your unique login and password.

Is Online Bill Pay for You?

If you have bills from several different sources, as most people do, online bill pay is worth the time to set up and the potential cost, which is low. If you only pay two or three bills each month, free online bill pay is a great idea. Another way to save is to see if you can pay those few bills for free directly at the payee's website.

Online bill pay services offer a convenient and safe way to ensure that your bills are paid on time. Although some services have a monthly fee, it may be offset by the savings you'll enjoy by not having to pay for checks and stamps.