What is it Costing You to Pay the Bills?

In this day and age, technology and speed matter. As Americans, we’ve grown accustomed to having everything we want at the click of a button or the swipe of a card. All across the country, we can complete nearly every transaction such as having groceries delivered to our doorstep, buying gifts and paying bills, over the internet. But sometimes these conveniences are costing us money unnecessarily.

It can be said that convenience comes with a price tag; we pay extra in order to get what we want in the quickest time frame possible. So holds true when it comes to paying our bills. Most utilities, major credit card companies, home telephone bills and even parking tickets can be paid online using a credit or debit card or you can have the funds electronically debited from your checking account. What you might not be aware of is that these services of convenience will often charge a nominal fee to process your payment, primarily due to the fact that not only is it a convenience, which a business knows consumers will pay for. But it’s also because these businesses often utilize a third party vendor to process these electronic payments.

There are certainly alternatives to paying fees whenever you pay a bill. Bank bill-pay services generally let you input the name, contact information and account number of the party you wish to pay and then transfer the funds from your account electronically to the payee you specified, or mail a paper check. As you might expect, this type of convenience service usually comes with fees and conditions. Let’s take a look at some of the most popular banks who offer bill pay services and how you can avoid these fees.

At Wells Fargo, a bill pay service is offered and – most appropriately – is entitled “Bill Pay”. Bill Pay is free for customers who have a particular type of checking account. For those customers who do not have an eligible account but carry a minimum balance of $5,000 at all times in a personal checking, savings, Money Market Access or remittance account, the fee for Bill Pay is waived for the first two months and is then $6.95 per month and includes up to 25 bill payments each month, with each payment per month that exceeds the 25 limit, costing $0.40 per payment.

Bank of America provides a very similar bill pay service and is also called “Bill Pay”. The main difference between Bank of America’s Bill Pay and Wells Fargo’s Bill Pay is that Bank of America does not have any minimum qualifications for using the service. Bank of America’s Bill Pay is a free service that is apart of their online banking package. Obviously, Bank of America’s Bill Pay service could be considered more attractive to those who don’t wish to have a specific bank account or are unable to carry a minimum balance of $5,000.

Naturally, there are consumers who still prefer to pay their bills by check or money order. But this isn’t free either. Consumers have to pay for the cost of checks and stamps. Sometimes the consumer even has to kick in the envelope to send back payment. Bill pay services can avoid these costs, but only when the bill pay service is cheaper than the cost of mailing a check.

Some banks like INGDirect offer bill pay absolutely free, no matter how much you have in your checking account. They even cover the cost of the stamp for regular delivery checks. You will have to pay for an overnight mail fee if you need a check delivered immediately, but otherwise there is no cost. While free online bill pay is offered by 80% of banks the do online banking, it is by no means guaranteed. Check the small print before singing up.