Like HowStuffWorks on Facebook!

5 Reasons to Use Online Bill Payment

Easy Consolidation

Online bill payment lets you declutter your finances (and your counter) in one fell swoop. If you're not a particularly organized -- or technologically gifted -- person, paying bills online might sound a little daunting. You might feel like it's easier to receive the paper bill in the mail, write a check and send it on its way again. But really, nothing could be simpler than online bill payment. Sure, there's a little setup time, but once that's done, you'll never have to worry again about late fees or losing things in the mail (or in the gigantic pile of junk mail on your counter).

There are quite a few services -- like PayTrust, Quicken BillPay, MyCheckFree and Billeo -- that allow you to consolidate bill paying. (Sites like Mint and PageOnce let you see all your accounts and use budgeting tools, but they don't have a bill payment function.) So if you're weary of jumping from site to site or pulling out the checkbook at different times of the month when bills are due, a third-party online billing service could be just what you need.

All your bills are collected (in some cases, scanned), e-mailed to you and posted to your account, and they're automatically paid out of the accounts you select on the dates you designate. You can see bill calendars and receive alerts when bills are due. With some services, you can pay anyone from any bank account (and sometimes with a check or credit card) [source: Pinsker]. And no more forgetting user names and passwords to pay each bill separately! Doesn't get too much easier than that, right?

Of course, all of these bells and whistles don't come for free (most services charge a few dollars per month plus a small fee per transaction), but many people find that it's a small price to pay for the convenience.