The Pros And Cons Of Automatic Bill Payment
One of the newest features offered by banking institutions today is automatic bill payment. This feature allows the account holder to schedule automatic, repeat payments for their monthly bills so that they will not have to remember to make these payments when the bills are due. The account holder can sign up as many or as few recurring payments as they wish and can cancel the automatic payments at any time.
The Pros
The biggest benefit and selling point of automatic bill payment is that the feature is exceedingly convenient. The person can schedule their payments to occur on the actual due date of the bill or schedule the payments to occur the day after their paycheck has been deposited into their account. Submitting the information needed for the payment to be made only takes a few minutes and the person will not need to view the information again unless any changes need to be made.
Another benefit of automatic bill payment is that the payment will never be late as long as the due date remains the same. Many companies have started tacking on hefty late fees to overdue accounts and are reporting delinquent payments in levels higher than ever before. When the payments are scheduled and paid electronically, the risk of incurring a late charge for an overdue payment is greatly reduced.
The Cons
People that regularly use automatic bill payment are at a greater risk of overdrawing their accounts and racking up a great deal of overdraft charges in a short amount of time. Any disruption in the average amount of money in the bank account, such as an inaccurate paycheck amount or an unexpectedly large withdrawal from the account, can cause a payment to be made while there is not enough money in the account, resulting in an overdraft before you know it.
If the due date of your bills can change from month to month, then this could cause another issue with automatic bill payment. If a bill is typically due on the 14th day of the month and you have the payment scheduled for the 13th day of the month, you don’t have anything to worry about, but if the due date of the payment jumps to the 12th day of the month, you risk having a payment paid late.
Taking into consideration both the pros and the cons of automatic bill payment will help you make an informed decision on whether automatic bill payment is the right choice for you.
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