By writing out checks to pay the bills every month, I was certain that they would be paid. I knew that I physically did the work and that I was taking it to the post office to be delivered. So the whole “online banking” concept just didn’t click. I didn’t want to be charged the $10 a month for someone to manage my bills, and I didn’t want to lose control of the handling of it.
However, flash forward four years later, and I am so glad I did this. I have saved nearly $8 a month on stamps, not to mention hours and hours of my time. Not only that, but I can easily view my transactions up to 18 months (longer if I go into the statements). However, there are many mistakes that can be made. Just be aware of them and your financial life can be a breeze.
The time to deliver is sometimes DRASTICALLY different
Some bills can be sent within two business days, but others take almost 7 business days. Why is this? Some major billing has an instant transfer. You will see this in major credit cards, or major financing places (like your bank or student loan). Other places will take 5 to 7 business days because they are sent via eCheck. This means that the transaction behaves just like a check that goes through the mail and then the processing system. The places that take the longest are oftentimes local payees such as your dentist or the utility payment.
The money is taken out right away
With a check being sent in the mail, you know that you may have a couple of days to get funds into your account before it is cashed. With online banking, the funds are withdrawn first and that money is sent to your payee.
Find a good bank
The fees associated with online banks can differ from bank to bank. I would be very cautious if your bank or credit union wants to charge more than $10 – $15 a month. Shop around for good checking or savings accounts.
Human error
Just like you can make mistakes writing out checks, and entering a wrong address, you can do the same with your online banking. It is especially important to make sure that you put the correct address in (have you ever noticed that sometimes a bill has two DIFFERENT addresses that are in completely different states? It doesn’t matter when paying by check, because you tear off the remittance, but when you put in the wrong address on bill pay, the place that you sent it WILL NOT forward it. Instead you need to send the bill to the correct place (withdrawing that amount again), while waiting for the other address to return your check.
Send it a couple of days early
Although the online bill pay will give you a calendar of when to send it, I always recommend giving it a couple extra days cushion. Why? I have no other explanation except to be safe. If there is a problem, you can always make a payment over the phone (careful about any transaction fees!)
Check it every day
Just like I recommend checking your statement every day, I recommend that you check bill pay every day. I also recommend that you “double check” on your first few bill payments sent out of online banking. Call the company and see when they got it compared to when you sent it.
Automatic bill pay
I cannot tell you how much I love automatic bill pay. You set up your payments every month and then….forget about it!
Although it appears as if there are many more cons than pros, I would never go back to writing checks: paper cuts, the fear of whether or not you sent it out, and your mail being stolen. Use all that time that you spent writing bills pampering yourself – you deserve it!
