Automatic vs. Manual Bill Pay

Here are some of the best ways to utilize automatic and manual payments

3/28/2018 11:00:00 AM
Automatic vs. Manual Bill Pay
The increase of technology in our society is not only seeping into our media and personal tech, but also into our finances. Many of your bills likely allow you to pay online and some will even have an option for automatic payments, with the money coming out of your account each month without you having to lift a finger or send a check in the mail.

But how do you know which bills you should set up with auto pay and which ones you should pay manually each month? Well, there are a few things to consider when deciding between automatic and manual bill payments.

Consistency of your bill

A few of your bills will be the same every month — things like rent, car payments and insurance are not likely to change. These types of expenses are ideal for automatic payments. Amanda Lilly, Online Community Editor for, suggests manual payments for bills that are inconsistent each month. “Bills that have a variable rate, such as your electric bill, can be especially tricky to track if you schedule automatic payments to cover them,” she says.

Your use of a credit card

If your primary form of bill payment is a credit card, you might want to consider manual bill payments — at least for the time being. If your credit card expires, or it gets lost, changing all of your automatic payments can be a huge hassle. But, if you’re using an online check or a direct bank withdrawal from a checking account, automatic payments are a realistic option.

Paying attention to your budget

Automatic bill payment can be a slippery slope if you are someone that often forgets to check your bank statements regularly. Losing track of your budget with automatic payments in place is the perfect recipe for overdraft fees. Natalie Wise, a contributor for, suggests automatic payments can lead to overlooking mistakes, too. “You might overlook mistakes that occasionally occur with auto-pay, such as double payments, missed payments (companies may charge you for that even if it wasn’t your fault) and fees you’ve never seen before, which could signal fraud.”

It's easy to avoid fees, keep an eye on your spending, and manage your accounts. Simply utilize the bank’s Online Banking and Mobile Banking app and you will be able to monitor transactions 24/7 when it is convenient for you to do so.

Paycheck to paycheck

Automatic payments withdraw money to your account, regardless of whether or not you have enough funds to cover the bill.’s Mitch Lipka suggests manual bill payments for those worried about their funds: “If you have a bill set up to pay automatically and you lack the money to pay it, this could affect your credit history as much as forgetting to mail in the check.” Instead of setting up automatic payments, consider manual bill pay if you’re worried about the check clearing.

Regular examination of your account activity puts you in control of your spending and saving actions. If you make it a habit to verify funds are available before paying a bill by checking your account balances using Online and Mobile Banking, you can confidently make payments and not be concerned about overdraft penalties.

Improving your credit score

If your credit score is struggling, auto-pay is one way to help improve it. According to Wise, the largest contributing factor to your credit score is your payment history. “Your payment history (i.e. whether you pay your bills on time) makes up 35% of your credit score,” she says. One benefit of automatic payments is nearly eliminating the risk of late or missed payments (assuming you don’t overdraft). In turn, this can dramatically improve your overall credit score.

Regardless of whether or not you’re using auto pay for your bills, keeping track of your finances to avoid overdrafts is an important part of managing your money. It is in your best interest to take advantage of North Shore Bank’s easy to use and convenient online tools that allow you to manage your money at any time, from anywhere.

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