by Moe Zilla

Created on: July 20, 2010

Electronic bill paying can actually end up costing you money - and you could even find that you're missing more payments! Here's why...

It's almost impossible to balance your checkbook with the automatic bill paying. Because most bills are due at different times of the month, on any given day you won't know exactly how much money you still have in your account. (Suddenly the money just starts sponatenously disappearing from your account!) Yes, you'll never miss a payment with  electronic bill paying - as long as your account has enough money to cover every bill. But just imagine what happens when your account balance gets a little low...

First, the amount of the next bills are still taken automatically out of your account, so eventually you're going to run out of money. But the automatic billing will keep hitting your account, guaranteeing that you're going to be overdrawn. At that point you're going to get hit with a hefty fee - either from your bank, because you overdrew your account, or from the company who sent you the bill. (Because your payment is now going to be late, and there may also be a punitive fee for initiating an electronic bill payment without sufficient funds to actually complete the transaction!)

But the best reason to avoid electronic bill paying goes beyond simple mathematics. It's important for yourself, as a person, to take personal responsibility for your own finances. With paper bills, you're systematically reviewing all of your bills, every 30 days, which among other things gives you 12 chances a year to cancel unneeded services (and save the money for yourself). After all, it's your money that's flitting off to major corporations, even though your life may have been very different when you first signed up for the service. Reviewing the bills is really the only way you're going to know where your money disappears to each month - and it's also your best chance to make changes in your monthly household budget.

Once a friend of mine found himself in the opposite situation. He'd signed up for automatic bill-paying with his internet service provider, and later he canceled the account - or thought that he did. But for some reason, the account remained open, and because the billing was automatic, they continued taking $19.95 from his checking account, month after month after month, without ever sending him a bill. Because he wasn't reviewing his monthly bank statements, he never noticed the money going out, and eventually he ended up losing close to $200!

Needless to say, ever since then, he's been opposed to all forms of electronic bill paying.

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