Online Bill Pay: What It Is and Why to Use It

Online bill pay lets you make individual or recurring electronic payments from your bank or credit union.

Margarette BurnetteJuly 24, 2020

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Online bill pay service, offered by many banks and credit unions, makes it easier to organize your bills and pay them when they’re due. If you juggle rent or a mortgage, cable and electricity bills, credit card payments and more, online bill pay can save time and help you avoid late fees.

Online bill pay also allows you to manage your payments to various companies — all in one place. There’s no need to pay a Verizon bill on Verizon’s website, a Wells Fargo credit card with Wells Fargo bill pay, then write a check to your landlord. Instead, you could do it all from your financial institution’s website or mobile app.

An added bonus: Many banks and credit unions guarantee your payments will arrive on time and will reimburse your late fee if they don’t.

» Skip ahead to see three excellent options for free checking accounts that offer online bill pay.

How does online bill pay work?

How online bill pay works is straightforward: Log in to your bank account, navigate to its online bill pay feature, then select the provider you would like to pay. If you haven’t paid the provider through online bill pay before, you’ll need to add it by plugging in the account number and billing address, then authorizing your bank to send payments for you.

» Looking for an online-friendly account? Check out NerdWallet’s favorite online checking accounts.

Payments can be sent by your bank electronically or via paper check, so you can pay even if the biller isn’t online — virtually eliminating the need for a checkbook. You can also choose a one-time payment or set up a recurring one.

If you’re trying to minimize unnecessary fees, signing up for free bill pay service is a good way to keep track of your accounts and avoid charges for missing or late payments.

Many banks offer basic bill pay service for free with their checking accounts, though they may charge for extra features, such as being able to access transactions from Quicken financial software. If you’re trying to minimize unnecessary fees, signing up for free bill pay service is a good way to keep track of your accounts and avoid charges for missing or late payments.

Many merchants and service providers offer the option of letting you receive an e-bill, or an electronic version of your paper bill, into your online bill pay account. If an e-bill arrives, you can have your bank alert you by email, text message, or push notification via the bank app. Typically, you can choose whether to pay the entire balance, just the minimum due or another amount. You can even opt to have your bills paid automatically.

» Considering a cash management account? See our top picks for these high-APY checking-savings hybrids

Checking accounts with free online bill pay

Here’s a comparison of three checking accounts that offer free online bill pay: Chime, Discover Cashback Debit and Axos Rewards Checking. Chime lets you enter payment information via its mobile app and will mail paper checks on your behalf. Discover and Axos offer electronic payment options in addition to mailing paper checks.

How to set up bill pay

The effort you take in the initial setup can save you time and headaches in the long run. Each bank or credit union will have its own rules, but generally here’s what you need to do to set up bill pay:

  • Gather your bills, including account numbers and the addresses to where you mail the payments.

  • Enter each biller’s information into your bank’s online bill pay platform.

  • Choose when to send the payment.

  • Select a recurring or one-time payment.

  • Set reminders to track when each bill is due.

Online bill pay helps you organize bills and keep track of due dates. It also makes it easier to see where your money is going, so you can make sure you have enough funds available to cover each payment. You receive and pay your bills all through your bank — one list, in one place.

» Don’t miss NerdWallet’s picks for the best banks and credit unions — institutions that offer services including bill pay, digital tools, as well as competitive interest on savings.

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