• Automatic bill payment occurs when money is automatically transferred on a scheduled date to pay recurring bills such as a mortgage, credit card, or utility bill.
  • Individuals can set up automatic bill payments through their online checking account, brokerage or mutual fund to pay their monthly bills.
  • The benefits of automatic bill payment include the ease of automatic payment, the ability to avoid late payments, and the ability to maintain or improve your credit score.
  • Disadvantages of automatic bill payments include the difficulty of canceling them, the need to keep sufficient funds in a checking account, and the possibility of chargebacks or late fees.