ACH stands for Automated Clearing House, and it refers to a form of electronic funds transfer, or EFT, to or from a bank account. How Does Automatic Bill Payment Work?Īutomated payments can be processed in one of two ways, depending on how you pay.įirst, you can make automated payments via ACH transactions. When a biller doesn’t accept recurring payments, you may have to set up online bill payments manually, pay by phone or mail a paper check.
If it’s a small local business, they might not be equipped to accept automated payments. For example, say you pay a lawn care company to cut your grass once a month. Keep in mind that some billers may not allow for automated payments. For example, you may be able to use automatic bill payments to pay your: The amount due for the payment is collected automatically by the biller according to your payment schedule.Īutomated payments can be used to pay different types of bills. You can authorize an automatic bill payment to be made using your debit card, credit card, checking account, savings account or money market account. What Is an Automated Payment?Īn automated payment is essentially what it sounds like: a payment that’s automatically sent to one of your billers from your bank account or credit card account. Here’s a closer look at what automated payments are, how they work and the pros and cons of incorporating them into your financial life. If you’re not currently using automatic bill payment, you may be wondering what all the fuss is about.
#Main bills to pay free#
Putting your recurring payments on autopilot can make paying your bills less of a headache and free up time so you can focus on managing other aspects of your financial life. Paying bills can be tedious and time-consuming, but there are things you can do to make it easier, starting with setting up automated payments.
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