When the economy struggles, so do consumers trying to make ends meet. Sadly, this is a common occurrence these days, as many consumers continue the battle against ever increasing living expenses
coupled with dwindling financial resources. This often results in the birth of new business models that may or may not help consumers in a time of need.
BillFloat is a start-up business that offers a solution to consumers who find themselves short on cash when the time comes to cover a bill. Founded in 2009 and backed by PayPal, BillFloat may seem like the answer to everyone’s dreams. As with all new businesses, it is important to learn as much as possible about the company before entrusting them with your personal finances. Here we take a closer look at BillFloat and how it could help you when cash is limited..
How Does it Work?
After reviewing the website and a few other online sources, it appears the concept is pretty straight forward. If you find yourself in a position where one of your bills is due and you do not have the money available to pay the bill on time, BillFloat will pay the bill and you repay BillFloat within 30 days. Sounds pretty simple, right? Let’s take an even closer look at how the process works to see what it entails.
The BillFloat Process
First you sign up as a BillFloat customer which is at no cost to you. You will be required to provide contact information, social security number, your bank account information and bank username and password. In some circumstances this request for personal information might raise red flags, BillFloat must obtain this information to verify your bank account and ability to repay.
Next, you select the provider that BillFloat will be paying. There are over 3,000 billers in their database ranging from insurance companies to cable providers. Once you select the company to receive your payment, you enter the amount of the bill and the date it should be paid. At this time BillFloat will calculate the fee for the transaction based on the amount of the bill. Fees can be as low as $4.99 but are again dependent on the bill amount.
Finally, BillFloat pays the bill on the day scheduled and you schedule when you will repay the bill plus the fee within a thirty day period.
Benefits of BillFloat
The benefits are fairly obvious in that you get your bill paid on time, which reduces late fees and damage to your credit. You avoid bank overdrafts which cost way more than $4.99 and extend the amount of time you have to repay the money to BillFloat. All of which can help a person who finds themselves short of cash when a bill arrives.
Drawbacks of BillFloat
Just as the benefits are obvious, the drawbacks are as well. Anytime you pay additional money on top of your normal expenses, you are decreasing the amount of money you would have for other financial goals. Granted, their fee appears very reasonable compared to payday loans or overdraft charges, however it is still a fee that can add up quickly. The model is also set up to reward consumers who pay back their money on time, by increasing the amount of money you can “float” and reducing fees. This might be habit forming for individuals who are constantly trying to make ends meet.
An interesting concept to say the least. As a start-up there is limited information available online to really form an opinion of this company and in times when scams are rampant, any new business is considered suspicious. On the other hand, it looks like an ideal solution for the occasional situation where a consumer needs help in paying a bill on time. I would love to hear from anyone who has experience with this company to shed more light on the subject.