spending

Pay Your Bills Online

Use the Web to streamline your bill paying. Find out your options and how to get started.

Still sending bills the old-fashioned way? You can save time and hassle -- and sometimes money -- if you ditch the checkbook and stamps and start paying your bills online.

Find a service

When it comes to paying bills online, you basically have three choices:

  • You can make many payments directly through a biller's Web site by entering a credit card number or authorizing a withdrawal from your checking account.
  • You can sign up for a bank's online bill-pay service.
  • Or you can use a third-party service, many of which collect bills for you and send e-mail alerts when payments are due.

However, the more convenience you want, the more you'll have to pay.

Free. Most billers will let you pay your accounts at their Web sites free-of-charge. But if you take this route, you could be going to a dozen sites a month to pay your bills. If you just want to dip your toe into electronic payments or plan to pay your bills with a rebate or air miles credit card, then this could be a good move.

Sometimes free and more convenient. Some banks, such as Bank of America and Citibank, offer online bill paying free if you open a checking account. Other banks will offer the service free to customers who maintain a minimum balance, or will charge a fee of $6 or $7. Your bills will still arrive by mail, unless your bank partners with companies that will post bills electronically. However, you can consolidate all your bill paying to one site, saving the time of going to each biller's Web site.

E-bill specialists. If your bank charges for the service, shop around. Some sights, such as Yahoo! Bill Pay, offer the same service for a lower price. The first three months of Yahoo!'s service are free. After that, it costs $4.95 a month for up to 12 payments, plus 40 cents for each additional payment. Yahoo! also has a long list of companies that can send bills electronically rather than by mail, and electronic payments to these companies are free.

Paperless all the way -- but at a price. To get all your bills via e-mail, you'll have to go with a service that collects your bills for you, scans them in and then e-mails you when they're due. Consider the good ol' U.S.Postal Service. Through eBillPay you get three months free then pay $5.95 a month for up to 15 payments, plus 50 cents for each additional payment.

Both Yahoo! and the Postal Service use CheckFree.com -- the heavyweight of online bill-paying -- to handle the mechanics. CheckFree pays late fees and interest of up to $50 if anything goes wrong with a properly scheduled payment.

If you make more than 15 payments, consider Paytrust. You can divert all your bills to Paytrust. You get e-mail notices as bills arrive, and you schedule payments with a click of the mouse. The comprehensive plan costs $12.95 a month for up to 30 transactions, plus 50 cents for each additional transaction (note that receiving a paper bill and paying a bill count as separate transactions, but receiving an electronic bill is free).

Set up your account

Just send your preferred service a signed authorization form and a voided check for the checking or money-market account from which you want to make payments. Then create a payee list online using the information on the bills you currently receive. Set payment amounts and schedule the payment dates.

You can arrange for recurring payments, such as your mortgage, to be sent automatically each month. You also can schedule payments in advance to ensure that you won't miss due dates and incur late fees. If the payee doesn't accept electronic payments (for example, your landscaper or a child away at college), the service will cut a paper check and mail it. These services also let you view your payment history.

While the Web can help you eliminate the monthly drudgery of paying bills there are some restrictions: Tax payments, alimony, child support and any other type of court-ordered payment generally may not be paid electronically.

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