Tips for Using Bill Pay Services

I have been using the free bill pay service through my credit union for the past 3 years. I always promised myself that I would begin to use the bill pay service once the per transaction price went below the price of a stamp. To make a long story short, I haven't written out a check to pay a bill in about 3 years.

A bill pay service allows your bank (or third-party service) to debit your checking account and either electronically send payment or write and mail the check on your behalf to the creditor. There are a few things that you must be aware of when using any bill pay service.

When setting up your creditors, be sure to triple check that you typed in the correct account number and remittance address.

This is extremely important. If you enter the wrong account number, your account will not be credited correctly and you risk being charged a late fee. This happened my father. My father typed in this Verizon account number incorrectly (he was off by 1 number) and you don't even want to know what he had to go through to correct it. This is probably due to the fact that Verizon customer service representatives aren't the sharpest tools in the shed. The problem is that you don't find out that there was a problem until the following month's bill comes. If you move and will be using the same utilities companies (water, electric, gas), be sure to CHANGE the account numbers with your bill pay service. I ran into this problem back in April. I received my first water bill and promptly paid it via bill pay. 3 months later (that is how often I am billed for water service) I received my second bill. At first glance, it appeared very high. After further review, I realized that my last payment was never posted to my account and I was charged a late payment fee. I immediately went to the computer, checked my bank records and found proof of payment. While I was on the phone with the water company, I realized that my account number had been changed. I just assumed that that the account number would follow me. Silly me. Thankfully, the water company had record of the payment being posted to the old and currently closed account and credited my new account along with the reversing the late fee.

Always schedule your bills to be paid one week earlier than the due date.

A lot of people that I talk to are concerned about the bank paying the bills late. The fact of the matter is that you tell the bank when the bill is due. They then debit your account a few days before and send off payment. As we all know, the creditors out there don't post payments as quickly as we would like. If you tell the bank that your bills are due one week before they actually are, there shouldn't be a problem.

There is no need to pay for bill pay service.

Many banks toady offer a free bill pay service, especially the credit unions. Start by asking your bank if there is a fee. You may be surprised. Seek and you will find. Ask and you shall receive.

Use the Automatic Bill Pay option.

The automatic bill pay option allows you to pay those recurring bills each and every month without having to think about it. Be careful though. Make sure that you remember the recurring payment and that you have enough money in the bank to cover it. Here is a Weekly Budget Spreadsheet to help you with this. Some bills that are usually recurring... mortgage/rent, credit cards, student loans & automobile loans.