File under BlueCollarDollar readers beware! This is how it it is supposed to work:
Debit Direct Payments This is the pre-authorized form of payment that use a schedule to take money from your account to make payments. I do this with fixed bills such as our house payment and our life insurance policy. The fixed part is important. Bills that have balances that vary or might contain charges that need to be reviewed or are unexpected can cause problems with this type of set-up.
Payment Calls or Notifications This plan works on your insistence. You get the bill and you notify the service to pay, either through your computer or by phone. Those creditors who do not accept e=payments can get their payment mailed.
Pay SitesThis is used by you, paying each creditor one by one at their web site, authorizing each to access your debit account for the balance of their bill. This can be time consuming.
Consolidation Bills that you would have normally received are forwarded to a consolidator whether electronically or by mail, and when the bill is due, you can review them online and from there, authorize payment.

It all sounds easy enough, and the convenience is the attraction. But most folks have some deep and well placed concerns. There is the lack of control over the whole process. The exact moment of payment, the writing of the check, the debiting your account, the posting and mailing have a certain feeling. The whole process is circumvented with electronic payment. Then there is the making sure that the money is there, as well as the possibility that bill might not be sent as instructed arriving late. Bill paying with a healthy dose of anxiety.

Next issue is security. If you are not using a service that is F.D.I.C. insured, you run the risk that some of the sensitive info you are sending on line might be compromised. Some service also run the risk of suddenly being out of business as cash for their operations dries up.

Concerns such as those are addressed by the not-for-profit group called NACHA whose 12,000 plus financial institution membership is working on creating the right rules and guidelines for this type of bill paying. Other downside risks to this type of payment seem, at least now, to outweigh the upside.

Internet connections for most of the country can be unreliable at best, and this static can cause problems associated with the loss of connection during the process of bill paying. Sometimes the paper trail is not what it should be and as of this writing, the IRS has made no stand on this type of service. They may not see a printed copy from your computer as "real" enough for their purposes. A canceled check might just carry more leverage. Customers of online services may lose what they called their "float", or the time the money stays in their account before the actual payment has been cleared. Online banking is immediate although the creditor doesn't receive the payment any sooner, and often later than you had anticipated. Prepayments are difficult and in doing so, might set yourself up for a late fee on the following month's bill.

All of these scenarios are, admittedly small and sometimes trivial. But each of these little "kinks" that the industry is working out, will cost BlueCollarDollar readers more than they would like to pay. Overpayments are your responsibility. Late payments, even though the money was there, and the money was removed from your account, are still your problem. And if those late payments carry charges that are beyond what the service was set up to do, you are the one who still must pay. And sometimes it can take just long enough so as to damage your credit history. All of these instances hurt more when things are tight.

Paying online requires more diligence than paying by paper checks. The upside to paying by snail mail, you can get stamps now that you don't have to lick.

Debt
Is there such a thing as good debt? What do you suppose bad debt is? And what kind do you have?

All content is © copyright (1999-2000)
BonPaulProductions (all rights reserved)