When I was in law school, my wife paid the bills. It was a depressing undertaking because we had more bills than money to pay them. After I graduated, my wife decided she had had enough and passed the torch to me. So for the last 20 years or so, I’ve been paying the monthly bills.
I’ve had it much easier than Mrs. Dough. Not only were we broke when she handled the checkbook, but Al Gore hadn’t invented the internet, yet. Today, as much as I loath paying bills, at least it’s manageable with the right online tools. I don’t have to fuss around with having enough stamps or envelopes, and I can pay my bills from my computer at home, at work, or even my phone.
If you still send out checks to pay your monthly bills (and I know some who still do), consider the following:
- Convenience – There’s no doubt that paying online is much more convenient because it saves time and just seems to make life easier. Online bill paying allows you to sit at your home computer and pay bills anytime night or day. You can eliminate the trips to the post office, long lines and traffic. The best part is that you can pay bills from anywhere, even when on vacation.
- Security – Security is the most important thing when it comes to our money. The software used for online bill pay requires a secured browser and the user has to enter a password. This is what keeps our personal information safe.
- Environment – Online banking is one small way to help the environment because it eliminates the need for a paper trail. It’s estimated that by switching to electronic billing statements the average American household would save 6.6 pounds of paper a year or 0.08 trees.
- Budget – Developing a budget or staying on budget is much easier when your payments are tracked for you. You can easily have insight into where your money is going and identify areas you can cut back on.
- Payment Scheduling – Being able to schedule payments automatically or ahead of time is a great perk of online bill pay. This helps you pay bills on time and helps avoid forgetting about an important bill.
There are many ways you can pay your bills online for free. Here are a handful of my favorites:
- Right from your Checking Account: Banks today offer free online bill pay for anyone who signs up for a checking account. One nice feature is that even if the company you are submitting the payment to doesn’t accept electronic payments your bank will send out a paper check on your behalf. The money is deducted from your account immediately and you have documentation that the payment was made. Many banks that offer online bill pay also offer mobile bill pay too. And if you want to pay somebody that doesn’t accept electronic payments, banks will cut a paper check and mail it for you.
- Online Banks: Because all banks offer online banking, it may seem odd to list online banks separate from plain old banks. And both offer free online bill pay when you open an account. But there is an important difference. Often online banks are able to offer lower fees and better rates. In fact, while traditional banks are raising fees, many online banks still offer free checking. One of my favorite options is the FNBO BillPay Account. Not only does it offer free online bill pay, but it pays interest on the money you have in the bank.
- Prepaid Cards: One of the least recognized benefits of a prepaid credit card is the ability to pay bills online. The funds are automatically deducted from your account, just like with a traditional checking account. Be careful, however, because not all prepaid cards offer bill pay. And some cards charge an additional fee for this service. There are some prepaid cards that will even send out a paper check if the company you are paying doesn’t accept electronic payments — just like banks do. One card that offers free bill pay is the READYdebt prepaid card.
- From the Company Website: Many companies offer online bill pay for their customers. It’s free and you usually choose how you want to pay – check, credit card, debit card, and even gift card (depending on the company). My gas bill, electric bill and cell phone bill can all be paid right from the company website for free. There are two advantages to this approach. First, you can set up automatic bill pay, so you never miss a payment. And second, you can use a rewards credit card for many of your bills and rack up some free cash. This is part of our approach in the Ultimate Cash Back Credit Card Strategy I wrote about a few days ago.
- My Check Free: My Check Free is an online bill payment service that allows you to view and pay your bills online. After you sign up, choose the companies whose bills you want to receive and view online. The service partners with companies to make sure your bills are ready to view and pay at the click of your mouse in one convenient, secure, online place. And best of all, those companies you’ve selected pick up the tab!
- Credit Unions: With rising bank fees, many have turned to credit unions for their banking needs. Many credit unions also offer free online bill pay to their members. It works just like any other bill pay service we’ve covered. As much praise as been heaped on credit unions, however, one word of caution. Because many of these financial institutions are much smaller than traditional banks, their online banking often lacks the polish and features of larger banks. Still, the right credit union can be a great option, and finding a good credit union is easy.