Identify possible advantages and disadvantages of using automatic withdrawal to pay bills.
Advantages of using automatic withdrawal to pay bills
1. It’s time-saving: if your bills are paid using automatic withdrawal, you are not responsible for physically making payments. Instead, payments are made whenever they fall due without your physical input. It saves you commitment time.
2. It is environmentally friendly: if your bills are paid with automatic withdrawal, you get no payment confirmation receipts. This implies less paper is demanded from trees. Demanding less paper promotes saving trees from being cut down hence protecting the environment.
3. Avoiding late payment: Since payments are automatically made when they fall due, you do not have to bother missing a payment on a specific date. This saves you from penalties you would have been charged for late payments.
Disadvantages of using automatic withdrawal to pay bills
1. Promotes unnecessary spending: you get so much convenience with automatic payments. Sometimes, this convenience gives you the confidence to spend money anytime and on anything you wish. You could spend money recklessly and without budgeting.
2. Possibility of being overcharged: Sometimes, your biller may withdraw the wrong amount from your bank account. In other cases, system errors could enforce a double charge on payments. Since you are not maintaining a constant monitoring on such errors, you could end up losing money without track of where it was lost.