If you are short on time, and keep your bank account at a sufficient balance, direct bill payment is essential for saving time and keeping your credit score intact. If you find yourself scraping by each month, direct debit may get you farther behind in your bills.
Pros: Using direct debit to pay your bills can ensure your payments are always on time and improve your credit rating. Delinquencies, or late payments, negatively impact your credit rating. Don’t let that happen to you! Signing up for direct debit will ensure all your bills are paid on time every month. By paying your bills on time each month, you can save money on costly late charges and fees. Direct bill payment will also save you money on checks and postage. The next time you order checks, divide the total cost by the number of checks you order. You may be surprised to find that each check costs you as much as 10 20 cents! Direct bill payment saves the cost of checks and there is no need to buy a postage stamp or waste gas driving to drop off your bill.
Some people use credit cards rather than checking accounts for automatic bill payment. By paying off their credit card each month, they incur no interest, but benefit by earning cash back or bonus points from certain credit cards. This is an effortless way to earn some extra or bonus points through the credit cards reward program. As an added benefit, it will save you time! It is a no hassle solution for people that want to simplify their lives and gain more control over how they spend their free time.
Cons: Using direct debit to pay you bills can cause your account to become overdrawn if you do not keep an adequate balance in your account for paying your bills. If you are accustom to keeping your account balance low, or rarely balance you checking account, direct debit may not be for you. Over-draft charges would occur if the account didn’t have sufficient funds for the payment. Another con of direct debit for your bills is that you may forget to review your monthly bills. This no hassle option makes it easy to forget about the bills. If the bills are forgotten, they will not get your occasionally scrutiny to ensure their is not an error on your account or to evaluated your usage. A consumer with a high electric bill may opt to use less the next month if they have a hefty bill. Direct debit may make a consumer blissfully unaware of their energy consumption.