Direct Payment

Imagine paying your mortgage, electric and credit card bills without ever having to write a check. Sounds convenient, but should you opt for so-called "direct payment"?

When you sign up for the service, your bills are automatically withdrawn from your bank account each month on a predetermined due date.

"You're not buying check stock. You're not paying postage. You're not taking time away from other activities," says Susan Robertson, of the Federal Reserve Bank. And you may even save money Ð some companies offer discounts if you pay them automatically.

SIGNING UP FOR SERVICE

Contact the companies you do business with and find out if they offer direct payment. If so, they'll send you a simple authorization form to complete. Some companies will even let you sign up online.

Next, you may have to mail in a voided check. The information they'll need is contained on the bottom of a check. It gives them the routing number for your financial institution, your bank and your account number.

Once you're registered, your payment will be pulled from your account on the same day every month. For example, your mortgage payment may be pulled from your account of the 1st of every month and your car payment on the 15th. If a payment varies from month to month, like for a phone bill, the company is required to send you an advance notice of the new amount and payment date.

CONVENIENCE CAUTION

This service isn't for everyone. Pass if:

You don't maintain a steady balance in your bank account. You could wind up paying fees for insufficient funds.

You're not well organized. You'll have to keep up with automatic payments and record them in your register to deduct them from your balance.

BRIGHT IDEA...

Interested in direct payment? Experts recommend you start off slowly. Start with one bill first. If all goes well and you like the service, start paying other bills automatically, too.

DID YOU KNOW?

More than one-third of US households report using direct payment for one or more recurring payments. On average, direct payment users make 2.4 electronic payments a month.

Read more smart consumer tips and strategies
from Fox11 Eyewitness News Online

PRIME PICKS

COPS
Tonight at 8:00 PM
Stupid Criminals Special Edition 4
Officers in Portland, Ore., find a trio of men and a large amount of Ecstasy; in Las Vegas, a suspect hides in a clothes dryer; police dogs in Sacramento, Calif., help officers catch a criminal