My telephone company sent me a flyer in this month's bill telling me I can go online to pay my phone bill rather than send a check. How does this work, and why would they offer me this service?
Lots of people push some of their bills off to the due date and then scramble to pay them in person. Many times these payments end up being made late. Some telephone companies find that their cash flow can be improved by offering an internet payment option. The customer logs into the phone company's website using his or her phone number, and provides either bank account or credit card information. The phone company then either issues a paper draft or electronic debit to the customer's deposit account, or a credit card charge transaction.
Of those options, the credit card option may be better, because it doesn't affect your checking account. until you decide to pay your credit card bill, and because you have stronger protections from unauthorized charges to your credit card account. If something goes awry and your credit card number is compromised, cancelling it and getting a new card is many times easier than getting a new checking account.
Do be aware, however, that some merchants (telephone companies are not the only companies that offer this option) may charge a fee for handling your payment this way. In most cases, that fee is less than the late fee that might be imposed if your payment doesn't arrive on time. But it's less expensive still to avoid any fees and send your check on time.
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Lots of people push some of their bills off to the due date and then scramble to pay them in person. Many times these payments end up being made late. Some telephone companies find that their cash flow can be improved by offering an internet payment option. The customer logs into the phone company's website using his or her phone number, and provides either bank account or credit card information. The phone company then either issues a paper draft or electronic debit to the customer's deposit account, or a credit card charge transaction.
