4 Myths about Electronic Bill Pay

by Stacy Tharp 18. March 2015

Electronic Bill Pay

Our adoption rates for Online Banking have grown immensely over the past few years, along with Mobile Banking, Mobile Deposit and most of our other digital products and services. The one service people still seem to be a little uneasy about is Electronic Bill Pay. When we dug into why people are so tentative to try it, we found that many people seemed to have some misconceptions about the service. We’re here to debunk some of the myths flying around about Bill Pay.

Myth #1: Paying bills electronically is not as secure as sending payments through traditional mail.

Although it seems like these days we are constantly hearing about a new electronic security breach, dumpster diving remains a top tactic identity thieves use to steal personal information. 1st Mariner Bank uses professional top-notch security with multifactor authentication to ensure all information and transactions performed online are kept secure – including bill payments.

Conversely, the security of paper bills is largely dependent on your behavior. If you forget to shred a credit card statement and someone decides to ruffle through your trash, that person will have found the key to committing fraud using your information.

Myth #2: Without seeing your payment being physically sent to the payee, it’s impossible to know if your payment was actually sent.

If you pay your bills by way of traditional mail, you may like the feeling of dropping your envelope in the big blue mailbox. You may get a feeling of satisfaction that your bill has now been paid. Only it hasn’t been paid yet, and when you get another bill with a late fee attached a few weeks later because your bill payment got lost in the mail, you have no way to prove that you sent in the payment.

With electronic bill pay, on the other hand, you receive a confirmation when a bill has been paid, and this confirmation is saved in your bill payment history. This makes it easy to dispute a late fee or a claim that you have not paid a bill.

Myth #3: You still need to see a paper copy of your bill in order to know how much to pay.

What’s the point in paying your bills through your Online Banking account when you still need to look at your bill to find your account number and exact amount that you owe? Isn’t that double work? Well, it would be if this were true.

In actuality, this can all be done through your Online Banking account by setting up E-bills. You just set up each of your payees one time by entering your specific account information, and once you do that, your account information is saved. You can even set up recurring monthly payments for hundreds of payees, even if the amount of your bill changes from month to month. Bill Pay will pull the information from each monthly bill and automatically pay the correct amount (if you choose to set up this automatic payment).

Myth #4: You have no control over when the payment is taken out of your account.

Just like in Myth #2, you may feel like you’re in control by watching your bill envelope drop in the mailbox, and choosing what day you drop it in; but in actuality, you don’t know when your payee is going to deposit your check. It’s important to keep good records of all of the checks you write so you do not accidentally overdraw your account.

Electronic bill pay often gives you more control over when the payment comes out of your account. Many businesses are set up to receive electronic payments, so the day you select to pay your bill is the day you will see the funds removed from your account.

I hope this cleared up any confusion you may have had about paying your bills electronically, and I encourage you to give it a shot.

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by Stacy Tharp 17. March 2015

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Be Selfish, Pay Yourself First

by Stacy Tharp 13. January 2015

Savings Piggy Bank

Let me rephrase that - paying yourself first isn’t selfish, it’s smart. But we should back up. What does it mean to pay yourself first? You (hopefully) have a monthly budget that includes your bills and day-to-day expenses. Paying yourself first means that before you take anything else into account, you first set aside a pre-determined portion of your income into a savings account.

So let’s say you want to save 20% of your income, and your monthly take-home pay is $3,000*. You would first set aside that $600 (0.20 x $3,000), which would leave you with $2,400 ($3,000 - $600) to then allocate funds for bills and other monthly expenses. Sounds easy enough, right? It’s almost as if that $600 was never there – except it definitely is there, earning you interest in your savings account!

This concept could get a little bit tricky during those months when you have a few extra unexpected expenses. You should always be prepared for months like these because no one is immune to unforeseen expenses.

So think about it ahead of time – if you have to make an emergency home repair, how are you going to pay for it? How about an unexpected medical bill? If you have three out of town weddings in one month, are you going to pay for the hotels out of your regular monthly spending money, or from a savings account? Maybe you want to set up a savings account specifically for vacations and use funds from that account.

There is no right or wrong answer when it comes to how to pay for these things – what you do want to avoid is not planning ahead, then panicking and stop paying yourself first.

You may have noticed that I was not specific about what type of savings account(s) you should use to pay yourself first. It’s up to you. It might be a good idea to speak with a Financial Consultant to decide how much money you should set aside, and into what types of accounts. The main idea is to have a plan of where you put your money, where you are “allowed” to pull money from in emergencies, and to pay yourself first!

*These figures are hypothetical and are not intended to be used as financial advice.



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