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Bill Pay Explained — How to Streamline Your Finances


  • Bill pay streamlines your bills, allowing you to automatically pay each provider on a recurring basis, all from one location. 
  • Banks and credit unions offer bill pay services, typically at no cost to you. 
  • Although similar, bill pay differs from autopay in that payments run through your bank account rather than through each lender or provider. 

Getting mail can really ruin your day considering it’s mostly bills. As soon as you see them, dread sets in and you know it’s time to log in to all your portals and pay your bills one by one. At least, that’s the way it used to be. Now many banks and credit unions offer a service known as bill pay. 

With bill pay you can organize and pay all of your bills in one area, even setting recurring payments that your bank takes care of for you. Before signing up, understand how it works, who allows bill pay, and what happens if you don’t have enough money in your account. 

What Is Bill Pay?

Bill pay is a free service banks and credit unions offer to allow you to pay all of your bills and loans from a single place. You can set up recurring payments, which your bank automatically sends to any lender or provider that you’ve added. 

Since online bill pay services tend to be free, there’s no harm in setting it up. Just know that you may not be able to add every one of your providers, especially if you have payments at small local companies or less established service providers.

Autopay is a similar service lenders and vendors offer, sometimes in exchange for a lower interest rate or monthly payment. But bill pay works best for those looking to organize their finances since everything happens in one place through your bank. 

How Bill Pay Works

Bill pay takes some time to set up, but it’s a simple process all the way around. You need to add each lender or provider you work with one by one, but once you put in the initial work, there’s little upkeep needed unless you add or change vendors. 

1. Setting Up Bill Pay

Once you sign into your account, one of the tabs or links on your account should say  ”payments,” “bill pay,” or any phrase along these lines. If your bank requires it, opt into bill pay to continue.

You may encounter options for wire transfers, account transfers, or person-to-person transfers through companies like Zelle. You can use those if required, but they’re not the same as bill pay and may come with some serious downsides, such as expense and less user-friendliness. 

Since bill pay is free and easy, stick with that unless someone specifically requests you use something else. If they can wait the five to seven days bill pay may take, you can even use it to pay friends and family.

2. Adding Payees & Managing Bill Payments

You add all of your payees (aka, whoever sends you a bill that you have to pay regularly) under this section. With each payee, you can often set the payment frequency, such as one-time payments, monthly payments, or quarterly payments. But this varies based on the bank or credit union you work with.

Under bill pay, you’ll see a button or text inviting you to add payees or a new biller. Some banks or credit unions have search boxes where you type in your vendor’s name and a list comes up. Others just have you type in all the business’s information.  

From there, enter your account number, the address (so your bank pays the right people), and any other information you’re prompted to enter. The information you need varies based on the bank you use, but you can find it either on your bill or in the vendor’s online portal. 

3. Choosing Payment Methods & Timing

When you add a payee, you must include the payment timing and method. Double-check the due date to ensure you aren’t making payments late. It’s a good idea to make the withdrawal date a few days before the due date so you know the money will get there on time, even if there’s a hiccup. 

As for payment methods, you can typically choose electronic transfers straight from your bank account. Some banks also send paper checks on your behalf. If you go this route, leave enough time for the check to reach your provider. Many banks say five to seven days is enough time. 

4. Managing & Updating Payment Information

If your mortgage payment goes up because of property taxes, you increase your internet speed and now have a higher internet bill, or your student loan payment drops because you refinanced, you need to manually update your payment information, or your bank will pay the vendor the wrong amount. 

To do so, sign into your account and head to your bill pay page or tab. You should be able to edit your bill pay preferences and vendors right from this page. 

Pros & Cons of Bill Pay

Bill pay offers a certain level of convenience, allowing you to keep up with your bills and see your payments all in one place. That said, banks and credit unions offer no real incentive to use the service, and there are downsides that may make other options more attractive. 


  • Saves time
  • Makes managing finances easy
  • Often free
  • Helps avoid late payments
  • Safer than alternatives


  • Initial setup takes time
  • Potential for insufficient funds
  • Potential for declined payments
  • Doesn’t always update with bills
  • Less responsive to bill increases
  • No discount
  • Long process times at some banks


If you’re considering signing up for your bank’s bill pay service, there are strong reasons why this is a good choice. 

  1. Saves time. Bill pay saves you from having to manually pay your bills each month online or through the mail, which is a time-consuming and inconvenient task.
  2. Makes managing finances easy. Bill pay organizes all of your necessary monthly payments, giving you your full financial picture in one place. 
  3. Often free. Bill pay is typically a free service banks and credit unions offer, so you don’t have to pay for the convenience. 
  4. Helps avoid late payments. Enrolling in bill pay means you don’t have to actively think about what payment is due and when each week. The bank will auto-draft them when it’s time. 
  5. Safer than alternatives. Bill pay is potentially safer than other options like autopay. All of your payments run through a single entity: your bank. With autopay, you’re volunteering your bank or credit card information to every provider you work with, increasing the potential for leaked financial information. 


While bill pay is a useful tool, some drawbacks may make some account holders think twice before signing up. 

  1. Initial setup takes time. Bill pay makes your life easier, but the initial setup takes time since you need to add each payee manually.
  2. Potential for insufficient funds. If you have overdraft protection and have insufficient funds in your account, auto-drafts will still try to go through. That may lead to extra charges, so keep your account funded. 
  3. Potential for declined payments. If you don’t have overdraft protection, that may be worse. If you have insufficient funds in that case, your bank may not pay it at all. If it does, you’ll be overdrawn, leading to an nonsufficient funds payment.
  4. Doesn’t always update with bills. If your bill amounts change, you may have to go in and update this change manually, as you’re not going through the lender itself, but rather just your bank. This can cause a surprise missed payment if you forget to update your account and don’t pay your bill in full. 
  5. Less responsive to bill increases. If your internet bill or subscription service cost changes, you likely won’t notice if you have bill pay set up. That doesn’t leave you the room to evaluate whether or not you’re willing to pay more. It may also just keep paying the same amount, leaving you in debt or with your service cut off. 
  6. No discount. When you sign up for autopay, you may receive a discount, either on your interest rate or your monthly payment. Bill pay doesn’t offer the same incentive. 
  7. Long processing times at some banks. Some banks have longer processing times than others, so account for that when selecting withdrawal dates. Check with a representative at your bank if you can’t find how long this takes on its website. 

Should I Use Bill Pay?

Bill pay is a helpful service for those looking to organize their budgets and save themselves time each month. Since it’s free, there’s no harm in setting up bill pay. 

In a way, it’s also more secure than options like autopay. You’re not giving your account information to a bunch of lenders and service providers, where it may end up in the wrong hands. Instead, everything runs just through your bank account. That’s fewer chances for your info to get into the wrong hands, if nothing else.

But there are times when autopay is a better option. Sometimes, you can get a discount for using autopay. A reduced monthly payment can save you hundreds, if not more. It may also be more convenient for bills that tend to change monthly, such as your electricity or gas bill. 

Whether you go with bill pay or autopay or decide to pay bills the old-fashioned way, understand the specific terms and conditions of each method. 

Bill Pay FAQs

Many features of bill pay make life easier. But bill pay is simply a way to organize your finances, not improve them. Still, the complexities behind bill pay make it a worthwhile option for many account holders. 

What Types of Bills Can I Pay Using Bill Pay?

Bill pay allows individuals to pay most common bills, such as rent, mortgage, cell phones, student loans, auto loans, and utilities. 

However, although rare, some banks don’t include more obscure bills, such as those from newer utility companies, memberships, and small businesses. For example, I just signed on with a relatively new internet provider, and I was unable to add them to my list of payees on my credit union’s bill pay option. Thankfully, most banks allow you to add payees.

Is There a Limit on the Number of Bills I Can Pay Through Bill Pay?

No, typically there is no limit on the number of bills you can pay through bill pay services. You can usually pay as many bills as you need, provided you have sufficient funds in your account to cover the payments. Your bank might not include certain providers in its bill pay catalog, though.  

Is Bill Pay Available for International Payments?

Some banks allow you to set up bill pay for international payments, but you’re likely to pay a fee for this service. Many banks can’t support regular international payments, but contact a representative to officially find out. 

Final Word

Bill pay is a feature many banks offer, and taking advantage of it can help you manage your bills all in a single location. You can set your bills to auto-draft straight from your bank account and all you need to do is fund your account and make adjustments as needed. 

While you can’t score a discount with bill pay as you can with autopay, there are numerous ways you can lower your recurring bills. There are bill negotiation services that can find and cancel subscriptions you never use and lower your payments on the bills you keep. For other costly bills, such as cell phones, you can consider cost-cutting moves like prepaid plans and family plans. Making these changes paired with services like bill pay can help you cut costs and budget better. 

Christopher Murray is a professional personal finance and sustainability writer who enjoys writing about everything from budgeting to unique investing options like SRI and cryptocurrency. He also focuses on how sustainability is the best savings tool around. You can find his work on sites like Bankrate, Money Crashers, FinanceBuzz, Investor Junkie, and Time.