Untangling Your Automatic Bill Pays

I get asked alot by our customers and our employees that help customers on a daily basis whether it is better to use the bank's bill pay or the biller's bill pay to pay your bills online. While there are pros and cons to each, I have found that, in the end, using a bank's bill pay is better. If you have ever tried to switch banks and have been using your billers' service to pay your bills you have probably already come to realize this.

On the plus side, using a biller's service can be very "hands off" once you have it set up. You simply authorize your biller(s) to take their minimum payment due on the date it is due and you are done - until you change banks. Once you change banks, or even just the account from which you pay your bills, getting all your billers the new account information can be a big hassle. Some billers allow you to do it online, others by phone, and still other require a signed letter to be sent by mail or fax. While this may not seem like a big deal at first, if you have 5 bills set up this way, it is 5 contacts you will have to make in some fashion.

From your bank's perspective, this is not a bad thing. It makes it harder for you to take your bank accounts elsewhere. Each bill pay you set up in this way is another "tentacle" the bank has around you. The more tentacles you bank has around you the harder it is to leave if you so desire.

If you had set up your bill payments using your bank's bill pay you have just one place you need to go. Also, most bank bill pay services have what's is called "e-bills" or "bill presentment" which simply means your bills will be sent electoncially to the bank and you can arrange for that amount due to be paid automatically. Now if you change banks, you will need to set up your bill pays again at the new bank, but that is something you can do in about 15 minutes at one site instead of having to contact all your billers individually.