WECT TV6-WECT.com:News, weather & sports Wilmington, NC Use Online Bill Pay to Boost Credit

By Andrew Housser

Of all the conveniences the Internet has brought us -- buying books and CDs day and night, receiving work documents in a flash, and free communication with friends around the globe -- one of the most useful is online bill payment. Paying bills online can save time, save money, save hassle and even improve your credit score by helping you always pay bills on time. Here's how to make the most of it -- and what to watch out for.

1. Understanding online bill payment. Some consumers sign up for online bill-pay services through their banks or credit unions. Others use stand-alone services. Independent bill-pay services offer predictable fees and stability, even if you change banks. Some companies charge for the service, while others include it free (generally for those with fewer transactions each month).
   
   
2. Finding an online bill pay service. If your bank does not offer bill pay services, or if you choose not to use its service, ask friends and relatives for referrals to companies that have worked well for them. Research the company online before handing over your private information.
   
   
3. Save time. Set up all your monthly bills to be paid online. With a one-time setup, you'll be done -- no more writing out checks every month. You can choose for a bill to be paid the same amount on the same date every month (a mortgage bill, for instance). Or you can input the amount each month for variable bills such as telephone or credit cards.
   
   
4. Save money. A free service will save money. If you usually mail 10 checks each month, online bill payment would save $50 per year in postage alone.
   
   
5. Save penalties. When you set your credit card to be paid every month, you can virtually eliminate late payments -- and the late fees and higher interest rates they incur. With the average late fee standing at $35, these savings can add up, too. Be sure to check the service to see how long it takes bill payments to reach the creditor. Payments may take several days. Plan ahead so bills are paid on time, and do make sure to monitor your credit card bill carefully for all charges to any change in payment-due date.
   
   
6. Raise credit scores. For those with difficulty paying bills on time, online bill pay can be a lifesaver. Preplanned bill payments can be in on time every month and never forgotten. Paying bills on time is one of the major factors in a good credit score. Making payments by the deadline can raise your credit score almost immediately.
   
   
7. Prevent fraud. Online bill pay has one more advantage: It reduces the risk of a thief stealing paper bills and payments, a major identity theft risk.
   
   
8. Watch the balance. Online bill pay has one major consideration. If your bank account balance is too low to make a payment when it is scheduled, you will face similar problems to those that result from a bounced check. Many online bill pay services will try a payment more than once, but if it does not clear, it could result in late fees, multiple insufficient-funds fees and other headaches. If you choose to schedule payments online, make sure to keep an eye on your bank balance to ensure funds are available when the payment is made.

Online bill payment offers many advantages. In fact, it can be one of the online services that improves quality of life -- and especially financial life -- the most. All it requires is a computer, a bank account, a stack of bills and some budget planning to make sure your payments will be covered. Log on, sign up -- and relax.