With all the things you have to do in a day, it can be hard to find time to pay your bills. If you are searching for a fast, easy, convenient way to pay your bills then, getting them automated is the way to go. With automated bill payments, you can save time and even some money. If you are unsure why you should automate your bill payments, here are a few compelling reasons why you should do so.
What is an automated bill payment?
This is a scheduled money transfer used to pay a recurring bill such as loan repayments, utility bills, car payments, or mortgages. Automatic bill payments are often made from a bank, brokerage, or mutual fund accounts to respective vendors. Setting up a bill payment requires making arrangements with your bank informing them to make the exact payment every month. Alternatively, the vendor can be given the power to charge the checking account for whatever amount is owed. In both instances, you must initiate the automatic bill payment and provide the required information to make the rest of the payments automated.
Benefits of bill payment automation
1. It's easier to make payments
With automated bill payments, you don't have to pay every bill individually. This means you don't have to visit different websites or file invoices at different times of the month to settle these bills. For instance, with utility bill automation, you can easily organize and view all of your bills in one place. Some companies even email you to let you know how they take payments, so rather than you scouring multiple websites to find them, they come to you.
2. It protects you from fraud and late payments
Making payments via the main comes with a lot of risk; after all, you are mailing a check in an unsecured mailbox. It can get lost in transit or stolen. However, automated bill payments are made through online banking, meaning they are more secure. Your accounts are protected through encryption techniques that the banks use to protect customer data. With automatic bill payments, you will never make a late payment as all your bills are paid on schedule. You can have them paid on a predetermined date or as soon as the vendor charges your account.
3. It improves your credit score
Paying your bills automatically and on time each month can help you improve and maintain a good credit score. Your payment history is an integral component of your credit score. According to Fair Isaac Corporation (FICO), having a consistent payment history can help eliminate any negative credit history. Since automatic payments help you make your payments on time and avoid delinquency, you are viewed as a responsible user, and your credit score increases.
Automating your bill payments has a lot of benefits. You get to save time, manage your money better, and improve your credit score. While automatic payments are great, a lot of care must be taken when using them. Misusing these services can end up costing you more as you risk costly mistakes, overdraft fees, and late fees.