Net Worth
Good Info I've Collected
- Debt Calculators and Debt Reduction Resources
- Financial Calculators
- Free Stuff
- Increasing Your Income
- Keeping Motivated
- Living Frugal
- Random Money Saving Tip
Site Design By
Site Hosted By
- Dreamhost - use code GIVEME50 and you will save $50 off your first year of hosting (I make $47).
My bank has had online bill pay available for a few years now. Even the price tag (free) couldn’t get me to switch over to using it. When it comes to my finances, I am a bit of a control freak and I track my accounts down to the penny. Plus, I had a bill payment system that I was using for over 8 years.
About two months ago, I decided to give online bill pay a try. With stamp prices going up, even if we could save a few bucks a month maybe it was worth it. So I tried it with one bill. The next month I tried it with a few more. This month I am replacing all bill payment checks that I would write with online checks.
What was so special about my previous system? I say this with a little bit of shame…I am a “floater.” Because things were so tight for us financially way back when, I grew accustomed to timing our payments and including float time (I include mail time up until the time the check clears the bank as the float). As a result, our bills were often paid right before they were due.
You can’t do that with online bill pay. You schedule the date that the check is to be cut and mailed and that amount is deducted from your bank account that day. No more 3-5 day float. Even though our finances aren’t as tight as they once were, I still was taking float time into consideration when it came time to mail out payments. It was a very bad habit that needed to be broken.
Now that we are paying the bills we normally pay by check with online bill pay, I had to shift around our finances a little. With some bills I would wait until receiving a certain paycheck before sending. Now I have to do it after the paycheck before. So far the transition has been going well, but I do rest a little easier knowing that our savings account is there in case I goof up a little.
There is only one thing I do not like about online bill pay. With sending a regular check to a vendor you are able to know if and when that payment clears the bank. Not so with online bill pay. The only notice you will receive of a payment not making it to its destination is when you notice a previous balance on your next bill or you receive a late notice. The control freak in me likes to be a little proactive when it comes to payments getting lost in the mail. If I see that something hasn’t cleared a few weeks after sending, I like to call and let them know that payment was sent. I think it shows good faith on my part, and I believe it has helped me avoid late fees.
In hindsight, I should have started using online bill pay a long time ago. I’m breaking my bad floating habit and it is so much easier to pay a bill online than write out a check. We are also saving money on postage. If you have been thinking about giving online bill pay a try, just give it a test run with one payment and see what you think. Don’t be stubborn like me and not even try it once before forming an opinion 
Random Posts
Leave a Reply
About This Site
Credit Card Debt
- Starting = $37,614
- Paid Off = $28,882
- Current = $8,732
- $25 ING Savings Bonus
Savings Account
- Current = $4,000
| BlogHer Ad Network |
| More from BlogHer |
| Advertise here |
| BlogHer Privacy Policy |
Posted: May 7th, 2008 at 1:39 am
Switching over to bill pay is a very good idea.
Not only is it more efficient, but fewer people want to deal with paper checks these days.
Posted: May 7th, 2008 at 3:59 am
I think part of the reason why cheques are still popular today is you can’t do a bank transfer. You can pay a bill online but you can’t send money directly to someones bank. Say you want to pay the piano teacher you have to write a cheque.
but having an emergency fund (or a budget buffer account as I like to call it) can go along ways towards eliminating that bad habit. Something I understand all too well.
Posted: May 7th, 2008 at 5:23 am
That is great! I wish checks would just disappear. I grew up in Canada and no one up there uses them….drives me insane when people use them at the grocery store (just use debit!)! I also HATE waiting days and days for the money to clear my account….I want it instantly removed so I know it’s not mine anymore.
I have one check I write every month for child support. I tried to convince the Mom to go to Paypal, but she wouldn’t! I hate writing checks!
Posted: May 7th, 2008 at 7:34 am
The ING Direct Bill Pay system tells you when a payment is cleared/processed. You just click on the little check picture next to the payment and it will say “Not Yet Cashed”……I am not sure if you are using ING, but I know I love that feature.
Posted: May 7th, 2008 at 7:49 am
Mark - no, I’m not using ING, but I have thought about it. Thanks for mentioning that!
Posted: May 7th, 2008 at 8:22 am
Some banks and credit unions offer a guarantee on payments made using online bill pay, and will refund you back any late fees due to errors or delays in clearing that occur. You might want to check if your bank offers that promise, as you can be sure if it costs them money to screw up they are much less likely to do so
Posted: May 7th, 2008 at 8:34 am
I have only paid one single bill with a cheque in my life. It was in my first year of college 8 years ago.
It was annoying, going through all the trouble of finding an envelope, writing a cheque, making sure my (service) account info was on the cheque, getting a stamp, going to the mail box… way too much effort just to give someone else money. I switched to online payments and never looked back, though I only have a few that I set up to pay automatically. The others I pay manually online.
The only thing I have used cheques at all for in the past 8 years is rent (and I’m looking forward to my automatic mortgage payments later this year). I haven’t even seen a little old lady use one at the grocery store for years.
<br/
@ Rob Madrid - where do you live? In Canada, I can do an Interac Email Money Transfer from my bank account to another person’s bank account even if they are not with the same bank. As far as I know all the major banks in Canada do it (BMO, CIBC, RBC, Scotiabank, and TD Canada Trust). It’s very convenient.
Posted: May 7th, 2008 at 9:00 am
I switched over yeas ago and for the most part I’ve only reaped the benefits of this. The drawback is that I personally don’t pay much attention to the paper bills that come in because I don’t have to do anything with them. This month I realized I forgot to make a payment!! I quickly fixed this and double payed right away but there are drawbacks to any system that you use.
And you may notice that there is still a potential float of a day or two depending on who you’re sending your payments to (especially if you make payments on the weekends).
Posted: May 7th, 2008 at 9:22 am
The online bill pay is nice because they pull funds quicker than mailing a paper check, but it still doesn’t feel instant enough to me. I like doing online EFT style payments. These things come out from my checking account at midnight, so I am reassured that the payment was made and processed within 24 hours.
I know what you mean when you say floating or writing hot checks, not enough money in the account when you write the check. That is one of those things that can get you in so much trouble if something tries to clear faster than anticipated. I never do this anymore because I have cut down check writing to nothing. Everything is paid through EFT, I use mycheckfree.com for utility bills, debit card, or cash. Hope your trial run meets your expectations.
Posted: May 7th, 2008 at 9:22 am
Tricia,
Most banks now use electronic payment for the payee since we live in an electronic world. Those usually only take 2 days (WaMu) but places like CompassBank likes to say 4 days just so they can earn interest on the float. They state if the payee does not accept electronic payment then they will send paper check. Most of your bills you should be able to check online after a few days of the ‘arrival date’. If you set it up Monday the payee should receive it by Wednesday and you should see it received by Thursday or definitely Friday via their online account services.
Posted: May 7th, 2008 at 9:22 am
I pay very, very few items by check. All of the bills that can be paid online are paid online. I check my online bank statement at least two times a week to see when things clear. I’m surprised you can’t check that way.
I’ve also started getting just about all my bills electronically. It’s less paper and easier for me. I’ve also started getting my bank statement online. I know there’s a chance of online identity theft, but there’s also a chance of having things stolen out of the mailbox. Matt is correct that you can forget to make a payment if you aren’t careful, which is w hy I have a list of all the monthly bills so I can make sure I pay them!
Posted: May 7th, 2008 at 9:24 am
This is a shout out for WaMu - you can make a payment on Sunday (before evening) for Tuesday and the payee will receive it Tuesday.
Posted: May 7th, 2008 at 10:05 am
Recently I’ve seen two gas stations and a local liquor store post signs saying they will no longer accept checks due to increase in processing fees. Given that, I foresee a day in the near future where those who pay bills by check may be charged an additional fee for processing. Another reason to switch to electronic payment.
Posted: May 7th, 2008 at 10:13 am
I currently use ING’s Electric Orange, and previously I used First Internet Bank of Indiana, and in both cases I was able to set up payments to my church and my gardener by saying something like “Pay a person” or “Pay an entity with no account number”, then the bank would mail them a check directly. The only thing I still use checks for is my exercise class at work, and occasional donations.
Further to the comment about the acceptance of checks - a lot of gas stations here in LA won’t accept personal checks at all.
Posted: May 7th, 2008 at 10:18 am
I’ll back up Mark B. about ING Direct: their Electric Orange paperless checking account is great! Tricia, I know you’re a fan of ING savings and you’d likely be just as much a fan of ING checking especially as you transition to online billpay. I personally have all of my direct deposits going to savings instead of checking and make 2-3 transfers to checking a month, which are effective immediately, as I perform bill paying runs.
We all have our systems and you may be old school and slow with the transition but that doesn’t make your system wrong or broke. You’ve come a long way with your debt paydown so that proves that your system is pretty acceptable. Big congrats on all you’ve done and the new experiences (online billpay) along the way!
Posted: May 7th, 2008 at 11:34 am
I’ve started paying some bills online, but not with the bill pay service from my bank. Instead, I create a login ID with my credit card and do an electionic fund transfer. I also have a login ID for my bank, so I can see when the money is withdrawn.
I was actually resistant to paying online - I like the physical process of wrting the check. Call me nutty, but there’s something about the process that makes it more “real” to me. I also like getting the photocopy of the checks with the statement. But, I switched to paying some bills online to reduce paper waste and the amount of gas used to deliver the payments.
However, I learned my lesson the hard way about waiting until the last minute to pay - I tried to pay one of my credit cards the day it was due. They were having technical difficulties so I couldn’t, and got hit with a late fee. Argh. My fault for forgetting about the bill until the day of.
Posted: May 7th, 2008 at 11:49 am
Are most online bill pay systems like that, where when payment is sent your account is deducted? Mine isn’t.
Through my credit union, the money stays in my account until the transaction clears, either through online payment or even if they cut a check for me.
Posted: May 7th, 2008 at 12:52 pm
I still can’t handle giving up control. But it’s something I hope to do in a few years.
Posted: May 7th, 2008 at 1:13 pm
I use online for most everything…
I’ve found every account I have has online access, so its pretty easy to check on things. To make things better, my bank lets me schedule online payments. For accounts that allow direct debit from my checking, I use that option - then if they screw up (Verizon did once) and a payment is late, its their own fault.
Generally, if a credit card bill is due on, say, the 12th, I schedule my bank to send the payment on the 8th or 9th. I give them a couple days leeway. The credit card company generally will have the payment posted the next day, so I can check on it and make sure that it did clear in time, and if it didn’t, I still have time to get things straightened out.
I also view it as a nice layer of ID theft protection. If I mail in a bill, that bill could sit in the mailbox for hours with all of that personal information on it, as well as a check that could easily be washed. Going online helps keep all that safe without having to go to the post office or risk them losing the check in the mail.
The nice thing that I like is that as soon as the bill is issued, I find out about it (all online accounts, remember), and can schedule the payment. No worries about forgetting anything. I can then enter everything into Quicken, which is what I use to tell me how much money is available in the bank, rather than what the ATM tells me I have…
Posted: May 7th, 2008 at 3:03 pm
I love my bill pay! I’ve never had a check not reach its destination in the several years since I started doing online banking, so don’t worry about that. Also, I no longer pay for my bill pay. You might consider going into your bank branch and asking how you can get it for free. I had to open a certain kind of savings account, but it doesn’t even have to carry a balance to keep my bill pay free.
Congrats on entering the 21st Century!
Posted: May 7th, 2008 at 3:11 pm
I hear ya… I am not a fan of “online bill pay” only because I don’t receive a confirmation that the company has received the money. That’s why we use “recurring bill pay”. I think you’d like “recurring bill pay” better than “online bill pay”, too. The difference is that you use your debit card to sign up for recurring payments on the service provider’s website. The service provider deducts the amount directly from your checking account – money clears from your checking amount on the date you specify. That way you have a confirmation that the bill has been paid. I like that much better.. gives me peace of mind and I don’t have to think about “what if” scenarios
Posted: May 7th, 2008 at 4:38 pm
My bank USAA has a “two tier system” If its a major company like Sears its automatic. But for my condo association they actually generate a check and send it to them so it depends on when they decide to cash it.
Posted: May 7th, 2008 at 6:00 pm
It took me a while to jump on the “online bill pay” bandwagon also! I got in on it when my bank offered a $10 bonus for trying it - TEN BUCKS? I’m IN!!! I LOVE IT!! I pay ALL of my bills thru online bill pay now, and hate having to write a check and mail it! My bank (credit union) shows the money going out the day I schedule it on my online statement when I log in - so it’s easy to keep track of.
Posted: May 7th, 2008 at 6:18 pm
Off Topic:
You had a post a bit ago about making sure to watch your credit limit as cards were lowering them to just above your balance. Well, ODDLY my credit card just raised my limit by $1,500!
Maybe they’re hoping I’ll do a little “stimulus package” shopping and get carried away??
Posted: May 7th, 2008 at 6:26 pm
I’d like to second the idea that instead of cutting a check for individual vendors, use PayPal, Revolution Money Exchange, or one of the other services (some even by cellphone) which facilitate the transfer of funds between individual’s bank accounts. I, too, am trying to talk the few remaining vendors to whom we (our billpay) send checks to accept one these forms of payment. Cleaner, simpler, easier record keeping. The most annoying was paying our heavty property taxes with a personal check and then having to watch and wait for it to clear.
Posted: May 7th, 2008 at 9:34 pm
I’m also paranoid about making certain my electronic payment actually makes it to its recipient, so I’ve set up online accounts with all my utility companies and credit card companies so I can check my balance with them to see if my payment’s cleared in the days after it’s been debited from my account. You could also call customer service to get the account balance if they don’t offer online account options.
Posted: May 7th, 2008 at 11:30 pm
Cheryl - I think for $10 I probably would have held out. This shift was pretty hard for me. Once you have a system down for so long (and it has worked well), it’s hard to change. If Intuit ever stopped making Quicken…well…I would be completely lost. I wouldn’t be able to function financially for months.
Sherri - that’s interesting about your limit being raised, especially the amount. It’s very “economic stimulus”-like.
Posted: May 10th, 2008 at 9:43 pm
With our bank’s (Suntrust, for what it’s worth) bill pay system, I specify the date that I want the payment to be received by the payee (usually 1-2 days before the due date) and the bank calculates when it needs to be sent. Some payments are done via EFT, and for others they cut and mail a check. They can also cut and mail checks to individuals - as long as you can identify a “Pay to” name and an address, they’ll pay them.
The funds are not taken out of my account until the payment clears, regardless of which method they use to send payment. I can click on any payment I’ve scheduled to find out the status (scheduled/sent/cleared).
I’ve been using the online bill pay almost exclusively for years now, and would never go back to writing and mailing checks myself.