Which of the following is an advantage of using automatic withdrawal to pay bills?

• A. It eliminates the need to monitor your bank account for unauthorized transactions.
• B. It reduces the risk of missing payment due dates.
• C. It guarantees that all errors in billing will be automatically corrected.
• D. It increases the likelihood of overdraft fees.

Answer: (B)

Verified step by step guidance

1. Understand the concept of automatic withdrawal: Automatic withdrawal is a process where funds are automatically deducted from a bank account to pay bills on a scheduled basis.
2. Evaluate the advantages of automatic withdrawal: One key advantage is that it helps ensure bills are paid on time, reducing the risk of missing payment due dates.
3. Analyze the incorrect options: Automatic withdrawal does not eliminate the need to monitor your bank account for unauthorized transactions, nor does it guarantee that billing errors will be automatically corrected.
4. Consider potential disadvantages: Automatic withdrawal may increase the likelihood of overdraft fees if the account balance is insufficient to cover the payment.
5. Conclude the correct answer: The primary advantage of automatic withdrawal is its ability to reduce the risk of missing payment due dates, ensuring timely payments.