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Bill Pay vs. Manual Payments

Oct 02, 2019 Personal Finances

Deciding how to pay your bills can have a big impact on your lifestyle and funds.

A woman sitting at a table, drinking coffee and using a laptop.

Figuring out the best payment options can be stressful, but it doesn’t have to be. Look at the breakdown below and choose an option that will give you the most ease while paying your bills.

What are my options?

Bill Pay

Bill pay is setting up your bills to be drafted from your account without you needing to manually do anything each month.

Manual Payments

Manual payments are ones you have to pay yourself every time it’s due. You have the flexibility to decide the drafting account and how much you want to pay for that particular bill.

What are the pros and cons?

Review Your Budgets

One of the key factors that goes into choosing bill pay or manual payments is knowing where your money is going, how much you have budgeted for bills, and how much is left over in your account. This knowledge will help you choose which bills you want to have automatically drafted and the ones you want to manually see and pay.

Consistency of the Amounts

Some of your bills will be consistent every month, such as insurance, rent, and car payments. Expenses such as these are great candidates for bill pay, because the payment amount doesn’t fluctuate. Input these amounts into your budget and let the automatic system take care of them for you.

Credit Card Usage

If you are paying bills with a credit card, it’s safer to do those payments manually so you are aware how much is being charged. If the need arises to cancel your card, not having automatic payments saves you from the hassle of cancelling all the automatic withdrawals.

Not Having Enough Funds

Manual payments are the safer way to prevent overdraft fees, because bill pay will withdraw from your account regardless of if you have money in there.

Lastly, keep in mind that paying bills on time is a great way to improve your credit score – it makes up 35% of how your score is calculated. Think over these tips and decide what will be easier and simpler for you in the long run.

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