Concerning online banking: Which is better--using automatic payment or manual payment options?

Question

I just need to know what is involved in each method.

Answer 1

~~I use both. I set up auto pays for anything which is due the same date every month and is always the same amount, i.e., house payment, car, etc.  Utilities and credit cards are always different amounts, so I just have to go in (I do this once a week) and set it up for the amount and the date you want it paid. It's still a hundred times easier than writing a check, or paying by phone, or having to go to each individual website. I love online banking. Just don't forget to deduct your payments from your register (you can printout a copy for easy reference), I have a list of what is paid automatically, so the first of every month I quickly put those in my register and get the amount deducted.~~  

Answer 2

Automatic payments come out at the same time each month.  Kind of like "Set it, and forget it."  That is the kind I like best, and it works if your bills are pretty much the same from month to month.

For manual payments, you type in the information once, like your account number and the phone numbers, and so on, just like the automatic payments.  But you have to go into the on-line banking system each time you want to pay a bill and tell the system to now pay the bill.  This works better if your amount that you are going to pay changes from month to month or if you are going to choose which bills to pay.  You might want to start with manual payments, and as you get more comfortable with the system and your budget, switch to automatic,

Answer 3

I use manual for credit cards and auto for utility payments like gas & electric.  

Answer 4

I prefer manual you have more control over your money and always know what your balance is.

In an emergency if you need the payment money to go somewhere else you won't get over draft fees from the bank; than all you will have to worry about is the finance charge and late fee for you bill.

You get charged fees every time the automatic payment is deposited and those can add up real quick. Check with you bank to see how much these fee are.

Answer 5

I prefer automatic payments. I use BofA online. They offer a lot of choices. You can auto-pay the minimum due or the full amount due or a set dollar amount every month. Also, to stay in control, you can arrange for email alerts when a bill comes in, when it's due, when it's set to pay or when your balance goes below a certain amount. It's pretty foolproof.  

Answer 6

It depends upon the amount of payments and how much reserve cash you keep in your account.  My home loan is auto-pay, but I split direct deposit more than enough to a separate checking account to cover that.  I write checks from that account for property taxes and insurance.

From another account I auto-pay electric and Blockbuster, manually e-pay credit cards (variable) and phone/DSL.  The only things I typically write checks for are water (local drop box) and gas (not sure if zeros spaced at end are part of acct#).

Note that if you auto-pay something that is variable, you should set that up with the company being paid (like electric co.), so the amount will be correct.  You would need to give them your bank routing# and account# from a check (NOT a deposit slip).  In the case of Blockbuster, I gave them my debit card#.

Answer 7

Well, with automatic payments the person who gets the money (bank, creditors, etc) can automatically withdraw an agreed amount from your account at an agreed time. This is generally done automatically for almost all car and bank loans these days. The advantage to this is you don't have to write cheques every month (or however often payments are due), and you don't have to remember to pay them on time. The disadvantage is if you don't have the money in the account when the bank tries to pull it, you get nailed with NSF charges.(if it's 2 different banks, you get nailed twice, and while the money may appear to come out late, your bank may still be checking your account on the actual day of the payment.. this has happened to me before, it was quite annoying)

With manual payments, you control the payment completely. The advantage to this is that you always have control over when they get the money. The disadvantage is if you forget to pay them.. and then joy oh joy, late charges.

Another problem some people have with automatic payments is times when the payment term is coming to an end, and I've heard it happen where the company didn't stop withdrawing the money. They continued the next payment date even though it was finished. This is not a common occurrance, but it can happen. In that case, you talk with your bank and your creditor and get the payments STOPPED, and get the creditor to give you a credit for the overpayment.

It just depends on what type of creditor you're looking at paying and what options are available... as I mentioned earlier, most if not all bank and car loan repayments are done via automatic withdrawal these days. They ask you for a void cheque, or for your bank information and you sign forms saying they're allowed to take $xx from your acct on such and such a date each period (monthly, semi-monthly, bi-weekly, weekly...), etc etc etc for however many payments there are in the loan term.