Paying bills online
What are the benefits of paying bills online? It can be quick and simple, saving you both time and money, since you don’t need to write checks or endure the hassle of mailing bills in on time. A bonus is that today, an increasing number of banks (both traditional and virtual) are offering it fee as an online service. Note that other banks require you to have a certain account minimum or charge a nominal fee.

Registering your bills
If you are using your regular bank, log on to their web site and you should be able to follow simple user-friendly steps that will help you register your bills. You only need to enter your bills’ account information once, since the site will keep those accounts available for future logins unless you remove them. Adding, deleting, or changing accounts is easy and can be done at any time.

Note that there may be some limitations surrounding the bills that you can pay, though these are minor. For example, you cannot pay court-ordered or federal and state tax payments online, and generally speaking you cannot pay bills to companies outside of the U.S.

Making payments
After registering the accounts you want to be able to pay online, next you will schedule payment. Simply select the account that you want to pay the bill(s) from, then select the bill you wish to pay the money to, enter the amount, and then choose the date it is to be paid. Keep in mind that depending on your bank, there may be a 4-5 days waiting period before bills can be paid. If you have trouble paying bills on time, a neat feature is to schedule recurring payments on specific dates.

Once your transaction(s) have been completed, print out your receipts or confirmation pages and keep them with your files as backup.

How do online payments work?
Creditors receive your online payment either through electronic payment or by check. If the payee is set up to accept electronic payments, your payment is automatically debited from the account you select and deposited electronically into their account, just as if you had written a check. Most businesses cannot at this time accept electronic payments, so they are issued a check based on your online payment instructions. This is why there is that 4-5 day waiting period mentioned above.

Tracking payments
Most bank and bill payment sites provide access to a list of all of your payments and their status: processed, pending, or scheduled. Some banks can even send an alert to your e-mail, PDA or banking site when a payment clears.

A caution note for those who choose the Internet for Online Bill Payment
Make sure you check your bill statements each month, for two reasons: First, you want to make doubly sure that your payment from the prior period has gone through. Secondly, check your account number and the company’s billing address to ensure that neither has been changed without warning. Imagine having an electronic payment sent to the wrong address or account number and the problems (not to mention late fees) that this could create!