Automated Bill Payments

Published: August 29, 2008

A few months ago, in my first column for this newspaper, I extolled the virtues of automated bill payments: Set them up once, let your utilities, phone and credit card companies pull what you owe from your bank account each month and never sit through the drudgery of a bill-paying session again.

And boy, did you let me have it. I heard from a number of readers who thought I was out of my mind for suggesting that they send money out automatically each month or give billers unfettered access to their credit cards and bank accounts. Horror stories poured in, as well as several specific questions and concerns.

So this week, we’ll look at five reasons that people are wary of automating their financial lives this way. But first let’s back up and define precisely what we’re talking about.

Until the 1990s, most of us were stuck writing a whole bunch of checks each month to pay our various bills. Then came the early Web-based bill payment systems, where we’d go to a bank or biller’s Web site and push a few buttons to move money to the right places.

Only more recently, however, has it become possible to pay each bill every month without lifting a finger. There are three basic ways to do this. You can give each biller permission to pull the full amount from your bank account. You can use the online bill system at your bank to push payments out automatically each month. Or you can charge every bill to your credit card and give only that card company permission to pull money from your bank account when the credit card bill is due. Each of these methods has its potential shortcomings, which will become clear as we march through the hiccups that can occur...

has been writing computer programs since 1970, and is still debugging them. The first modem he used was as big as a washing machine but not nearly as useful.
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1 Response

  1. LarryS says:

    I've used online bill pay before there was a internet. I used Prodigy to pay a number of bills

    and never had any real issues. Just recently I had a problem with Ebay/PayPal. It took time and

    perseverance to resolve the problem, but was finally solved. I would second the advice

    given in the story. Check your statement carefully every month and immediately bring any

    discrepancy to the attention of your bank.

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