How do you pay bills online? You’ve got two main ways. Use the bill pay tool inside your bank’s website or app, or pay each company directly on its own site with a bank account or card.
Your bank’s bill pay is the easier one to live with, because every bill sits behind one login. Paying each company directly takes more setup, but some of them give you a discount for turning on autopay.
Either way, you stop writing checks, you stop buying stamps, and you stop paying late fees because an envelope sat on the counter for a week.
What exactly is online bill pay?
Online bill pay is a service from your bank or credit union that sends payments for you. You tell it who to pay, how much and when. The bank takes the money out of your checking account and gets it to the company. Most payments go electronically. If the bank doesn’t have an electronic connection with whoever you’re paying (think a landlord or a small local business), it prints a paper check and mails it for you.
You can use it for pretty much any bill: mortgage, utilities, credit cards, personal loans, insurance, even tuition.
How does online bill pay work?
You add a payee (a person, a company or a vendor), and the bank handles the rest. You can pay a bill once, or set it to repeat every month so you never think about it again.
Timing is the part to watch.
An electronic payment usually gets there within a day or two, but a mailed check can take several days longer. So schedule the payment a few days before the due date, not on it.
Many national banks today offer the basic bill pay service free of charge when you open a checking account with them.
Ways to make online bill payments
You have a few options, and all of them take just a few clicks once they’re set up.
Bank’s online bill pay
The easiest option is the bill pay feature that comes with your checking account. Most banks have one. Check your bank’s site or app to see if you already have access or if you need to sign up for it.
Setting it up takes a little effort the first time, but it can save you a ton of headaches later. Each bank or credit union does it a bit differently. Here’s the general idea:
- Collect your bills, including the account numbers and the addresses where you mail payments.
- Enter each payee’s information into the bank’s bill pay tool.
- Choose when to send the payment to each biller.
- Select whether the payment repeats or is a one-off.
- Set reminders so you can track when each bill is due.
The best part?
You get one view of where your money is going, so you can tell at a glance whether you have enough cash to cover what’s coming up.
Paying on the company’s website
Most companies let you pay on their own site or app. You create an account, add your checking account, debit card or credit card, and either pay each bill yourself or turn on autopay.
The upside is that some companies knock a few bucks off your bill for using autopay. The downside is that you end up with a separate username and password for every company you pay. And if you set up automatic payments, look over your statements anyway. Autopay will happily pay a bill that’s wrong.
Paying through your prepaid debit card
Don’t have a checking account? A prepaid debit card can do the job. You can use one to pay on most companies’ websites, from utility bills to student loans.
It’s a little less convenient, since you pay each company on its own site and you have to keep the card loaded. But it works, and you’re not mailing anything.
Is online bill pay safe?
It’s a fair question with all the news about identity theft. Banks and company payment sites encrypt your information, and paying online means your account number isn’t printed on a check sitting in a mailbox. Most of the risk is on your end, so do the basics. Use a strong password you don’t use anywhere else, turn on two-step login if your bank has it, and only pay bills on a site you typed in yourself, never from a link in an email or a text.
Is online bill pay free?
Usually, yes.
Most banks and credit unions don’t charge you for standard bill pay. Some do charge for extras like a rushed or same-day payment, so read the fine print before you use those.
Paying on a company’s own site is normally free from a bank account too. Watch for a convenience charge when you pay with a card. If you see one, switch to your bank account.
Paying your bills online saves you money
Paying online saves you time, that part is obvious. It can also save you money and help you live below your means.
With paper bills there’s always a chance of paying late. You didn’t get to the mailbox, you couldn’t find your checkbook, or you just forgot. Schedule your payments ahead of time and those late fees go away. You also skip the cost of stamps and checks, and you might pick up an autopay discount or two along the way.
Final thoughts
Bottom line: if your bank has free bill pay, start there. Add your three or four biggest bills this week, set them to repeat, and schedule each one a few days before it’s due.
Then check your account once a month to make sure everything went out for the right amount.
That’s it. No stamps needed.