Online bill pay or mailing the bills, the choice is yours

July 19--Is automatic bill pay a good idea?

Paying bills automatically through your checking account or credit card is touted as convenient, easy and a way to save time and money. It's great if you go out of town, because you don't have to worry about bills that would have arrived by mail.

Some people still don't trust online bill pay because they fear something could go wrong, like a computer glitch. They prefer to stick with mailing bills.

Others have chosen a middle ground, where they pay bills that are usually the same amount each month, such as auto insurance, automatically online. They pay bills that vary each month by sending a check through the mail, or pay those bills online after they receive it in the mail.

Another benefit to paying your bills by credit card is the cash back or rewards points you can reap. And some bills can't be paid with an automatic deduction for your checking account. West Palm Beach water utility customers, for example, can pay online, but only with a credit card.

Florida Power & Light Co. customers can pay online with an automatic deduction from their bank account through a program called Automatic Bill Pay.

A credit or debit card payment option is offered through a third party, Western Union Speedpay , for $3.25 per payment. Western Union Speedpay receives the fee. As a regulated utility, FPL cannot incur credit card fees that would be passed on to all of its customers, said FPL spokeswoman Heather Kirkendall.

About 1.1 million of FPL's 4.7 million account holders use Automatic Bill Pay, Kirkendall said.

Of course, if you're paying bills automatically, you have to make sure there's enough money in your bank account to cover them, or you could end up with an overdraft fee.

But there's also less chance of paying a bill after its due date and incurring a late fee.

There's no free ride to managing finances. You still have to keep track of everything. Check your bank accounts frequently. Many companies send a reminder email stating the payment will be withdrawn in a few days.

Clearpoint Credit Counseling Solutions says the average household can save about $70 a year on postage costs alone. You are also writing fewer checks.

There's also less paperwork and clutter, and you can view your bills online or print them if you wish.

What are some other potential pitfalls?

Mercedes Rodas, ClearPoint Outreach Counselor in West Palm Beach said, "In my personal experience a downfall of bill pay is the time frame a financial institution takes to disburse the payment, for example "5-10 business days." Depending on when the bill is due this can be a potential problem to the consumer."

Sandra Rains, a Tampa-based Clearpoint Education Specialist said that online bill pay allows you to pay a variety of creditors at various times of the month. She also said to make sure you know your bank or credit union's policy between the time your account is debited and the payment is processed.

Consumers can sign up for automatic bill pay directly through the websites of companies such as AT& T, Allstate, utility companies, mortgage companies and more, or through their bank. Some banks charge a monthly fee unless an account qualifies for free online bill pay.

Through your bank, you can pay almost anyone with an automated check that is mailed to them, such as a lawn service or landlord that doesn't have online bill pay.

There's always a security risk. Bills can be taken from a mailbox or from the garbage and personal information can be gleaned from them. That's why they should be shredded after being paid.

Online accounts can be hacked. Experts say there's less chance of becoming a fraud victim through online bill pay than through paper bills. Some people prefer to pay online bills with a credit card because they feel the fewer creditors who have access to their checking account, the better. There are also the protections of the credit card.

Whatever method consumers choose to pay their bills, they have to be vigilant.

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