Paying Household Bills

There are several ways to pay household bills.  Oftentimes households use a combination of several available systems. This is a guide to aid in the decision-making process to see which payment system is best for a particular merchant and particular circumstances. 

I have listed below the methods which I have experienced to be the most helpful in a household situation, but there are also other ways.

Your bank’s website Bill Pay function.
How it works:

  • Automated Clearing House (ACH) payments, also known as Bank Bill Pay:  The user creates a vendor account and schedules the payment directly on the bank’s website.  The bank mails a paper check to the vendor which arrives within 5-7 business days. These payments can also be scheduled in a recurring basis for those bills that are the same amount in each billing period.
  • Electronic payments: Schedule a payment to companies, such as utilities, insurance, etc., that accept electronic payments. These companies are identified on the bank’s website. Usually these payments are transferred next day, or within two days.
  • Electronic bill (E-bill):  Some major companies provide E-bills.  This is a service where the merchant sends an E-bill directly to the user’s Bill Pay account and alerts the user the payment is due in the website’s Bill Pay section.  The user then schedules the payment.

Most banks keep a record of past and present payment activity for all the methods above.
All payments are reflected on the bank’s statement.

Company website payments.
Most utility companies, insurance companies, banks (for credit card payment, mortgages, etc.), etc. allow direct payment through their websites.  Some of these companies use a 3rd-party system.
How it works:

  • The user creates an account at the merchant’s website, or at the 3rd party’s website, and enters the payment method, be it a credit card or a bank account.  The payment method is stored on the website. 
  • When the bill becomes due the user receives an email alert.
  • The user can choose to pay the bill automatically each month or schedule the payment each time.

All payments are reflected on the user’s credit card or bank statements.

In my experience the advantage to this system over E-bills in the bank’s Bill Pay is that the user has greater access to the history of the payments and to the invoices which are stored on the company’s website.

Electronic invoice
Increasingly, vendors offer you the ability to pay their invoice directly in the email they send you. This is very quick and convenient method to satisfy the obligation. 

There are also many applications that aid with bill paying, many of which may be applicable to a household setting. I will be glad to discuss other possibilities as appropriate