Online bill pay: what it is and why you should use it

In addition to the convenience of paying bills from your own computer day or night, you’ll save the cost of a stamp and the trouble of going to a mailbox.

How many bills do you juggle each month? Rent or mortgage, internet, cable, electricity, cell phone, credit cards — the list goes on and on.

For many people, the answer is in the double digits. And every now and then, one of those bills slips your mind and you get socked with a late-payment fee. According to a 2016 survey by financial technology firm Fiserv, more than a third of consumers, or 35% of the respondents, paid a bill late in the previous 12 months, and 65% had a late fee.

Online bill payment, a service offered by many banks and credit unions, makes it easier to organize and pay your bills, and avoid extra charges. In addition to the convenience of paying bills from your own computer day or night, you’ll save the cost of a stamp and the trouble of going to a mailbox.

Paying your bills online isn’t revolutionary — it’s done by a large majority of Americans. But most do it using multiple websites and various providers. That raises the odds of forgetting a payment.

Instead, think about receiving and paying your bills all through your bank — one list, in one place — and consider how that could simplify matters.

How it works

The concept is simple. After you log in to your bank account, navigate to its online bill pay feature. Then, you select the bill provider and plug in the account number for each of your bills, and authorize your bank to send the payment for you.

Payments can be sent by your bank electronically or via a paper check, so you can pay bills online even if the biller isn’t set up for it. And you can choose a one-time payment or set up a recurring one. You often can select whether to pay the entire balance, just the minimum due, or another amount.

In addition to paying companies such as your electric or cable providers online, you can also have your bank send a payment to a person, such as your landlord, virtually eliminating the need for a checkbook.

Setting it up

The initial setup isn’t quick, but the effort will save you time and headaches in the long run. Here’s what you need to do:

• Gather all your bills, including account numbers and the addresses to where you mail the payments.
• Enter each biller’s information into your bank’s online bill pay platform.
• Choose when to send the payment.
• Select recurring or one-time payment.
• Set reminders to track when each bill is due.

Many merchants and service providers offer the option of receiving an e-bill, or an electronic version of your paper bill. If an e-bill is available, your bank typically will alert you. Then, you can choose to have the statement delivered to your online bill pay center, or continue to receive it in your mailbox or inbox. It can take a few billing cycles for e-bills to take effect.

Why use it

Instead of paying your Chase credit card bill on Chase’s website, your Verizon bill on Verizon’s website, and writing a check to your landlord, the online bill pay feature lets you do it all from your financial institution’s website.

This helps you organize bills and keep track of due dates. It also makes it easier to see where your money is going and when, so you can make sure to have enough funds available to cover each payment — which is hard to do when paying via several websites.

An added bonus: Many banks and credit unions guarantee that your payments will arrive on time, and will reimburse your late fee if they don’t. Try getting that guarantee from the post office.

ONLINE BILL PAY LINKS FOR MAJOR U.S. BANKS

Ally Bank (read review)	Bank of America (read review)
BB&T Bank	BBVA Compass Bank (read review)
BMO Harris Bank	Capital One (read review)
Chase Bank (read review)	Citibank (read review)
Citizens Bank	Fifth Third Bank
KeyBank	M&T Bank (read review)
PNC Bank (read review)	Regions Bank (read review)
Santander Bank (read review)	SunTrust Bank
TD Bank (read review)	Union Bank (read review)
U.S. Bank (read review)	Wells Fargo (read review)

Alternatively, you can consider a separate service such as Mint Billsor Moven. Both allow you to view, manage and pay your bills online. Mint lets you pay your bills through its smartphone app. You can also link multiple bank accounts to it, making it easy to see whether you have enough funds to cover upcoming bills.

Kelsey Sheehy and Jeanne Lee are staff writers at NerdWallet, a personal finance website. Email: ksheehy@nerdwallet.com orjlee@nerdwallet.com. Twitter: @KelseyLSheehy or @jlee_jeanne.  

This article first appeared in NerdWallet.