9 Bills You Should Never Put on Autopay (2023)

9 Bills You Should Never Put on Autopay (1)

We can all use a simpler, more efficient way to manage expenses andsave money. Putting your bills on autopay can ensure never forgetting a due date, which minimizes the risk of late fees and dings on your credit report. But although automatic payments can save time and streamline your personal finances, it isn’t the right choice for every expense.

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Autopay is ideal for payments which don’t fluctuate every month, such as your mortgage and car payments. You know what to expect from these bills, so it’s easier to plan and budget for automatic drafts. This isn’t the case with monthly expenses that fluctuate. Before you get excited andput your entire financial life on autopilot, here are some bills you should never put on autopay.

Make Your Money Work for You

Cellphone

If you have an unlimited cellphone plan and your bill never varies, autopay is a time-saving strategy for managing payments. There’s also the option of setting up automatic payments for a non-unlimited cellphone plan. The problem, however, is the amount you owe can change from month to month, depending on data usage. And if you forget to read your cellphone statement in months where you owe more than usual, the extra funds taken from yourbank accountcould trigger an overdraft and bank fees.

Some cellphone plans also don’t have the same billing date each month. While you might have a set date — say the 15th — others have a monthly cycle which varies depending on the number of days in the month. This doesn’t guarantee a consistent payment date each month. You could be caught off guard, or out of funds, if a payment posts when you weren’t expecting it.

Since autopay is a hands-off approach to paying bills, you’re also less likely to inspect your cellphone bill after setting up automatic payments. This means you might not catch billing errors and will pay more than necessary.

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(Video) 9 Bills You Should Never Put on Autopay

Utilities

Unless you’re on a budget plan through your utility company — which lets you pay a set amount every month — your water, gas and electric bills will fluctuate monthly. Therefore, it’s generally safer not to set utility bills on autopilot.

Initiating one-time payments every month involves signing into your accounts. In this case, you’re more likely to review statements before making a payment. And when you regularly review your statements, it’s easier to identify unusual price increases.

For example, a higher water bill can indicate a water leak in your house. If you set up auto-draft for this bill and never review your statements, a leak might go unnoticed for months and cause extensive damage to your home and your wallet.

Make Your Money Work for You

Gym Membership

A gym membership helps you get into shape and lose excess pounds. Butyou could lose more than that if you’re not careful.

If you’re committed to visiting the gym regularly, putting the monthly membership fee on autopay is a good idea. But despite your intentions, your actual time spent at the gym could be far less than anticipated — to the point where it no longer makes sense to pay for a membership.

With autopay, some bills become out of sight and out of mind. As a result, there’s a risk of losing track of money being drafted from your account. Or, you become so accustomed to paying certain expenses you fall into a rut of paying for a membership you never use.

On the other hand, if you pay monthly, you’re more likely to evaluate your gym usage occasionally and cancel the membership if you’re not using it.

(Video) Bills You Shouldn't Put On Autopay

Cable and Satellite Service

Your cable and satellite bills can vary, especially if you watch a lot of movies on demand. With your cable bill automated and funds taken from yourbank account, you might never monitor the amount you spend on extra services.

Cable and satellite companies may increase their rates each year and include fees for new offerings, such as regional sports networks, on channels you don’t watch. Paying the traditional way, by check or by making a one-time payment online, gives you the chance to review your bill for price increases and all the options you might not be using.

Evaluating your cable or satellite bill will also let you know when all those promotional offers you signed up for have expired. This could motivate you to call the company and ask torenegotiate your services.

Make Your Money Work for You

Video Streaming Services

Streaming services, like Netflix and Hulu, are convenient because you can watch whatever you want, whenever you want. But think twice before signing up for these services. If you have cable, some of the shows and movies offered by streaming services are available through your cable provider on demand.

If you get used to streaming fees coming out of your bank account or being charged to yourcredit cardevery month, you might pay these fees month after month without considering whether you need the services. When you sign up for streaming but don’t take full advantage of the service, you’re essentially flushing money down the toilet.

(Video) 7 Bills You Should Never Put on Autopay - Here's Why!

Music Streaming

Music services, like Spotify and Apple Music, allow you to stream just about any song from any artist. The downside is you have to provide a credit card or bank account number before accessing songs. The music service automatically charges the monthly fee to your account.

Streaming music is a fun luxury, but only if you’re getting your money’s worth. If your usage drops and you stream less music (or you stop streaming altogether), the company continues to draft your account until you cancel your subscription. If you forget to cancel, you end up paying for a service you don’t use anymore.

Beauty Boxes

Several beauty brands promote beauty box subscriptions, where subscribers receive a box of products each month to sample at home. This is a smart marketing tactic for cosmetic companies, and it’s an easy way for you to experiment with different beauty brands before paying the full retail price.

Since these subscriptions are relatively inexpensive — typically starting as low as $10 a month — it can seem like a minor monthly expense. But the cost of a beauty box subscription adds up over the course of the year. If you set up automatic payments for this subscription, you might neglect to break down the cost and calculate its value. You might spend more than $100 annually, yet only use a small percentage of the items in your boxes.

Make Your Money Work for You

(Video) Watch This Before Signing Up For Credit Card AutoPay | Is Autopay Hurting You?

Newspaper Subscription

If you prefer reading the news over watching it, subscribing to a print or digital edition of a newspaper puts the latest headlines at your fingertips.

Some newspapers give subscribers the option of automatic payments. This isn’t a bad deal if you regularly read your newspaper. But if you get busy and pile the newspapers in the corner without reading them, you’ll waste money paying for a subscription you don’t use.

On the other hand, if you schedule one-time payments every month, you’re more likely to cancel the subscription once you’re no longer benefiting from the service.

Annual Subscriptions

If you have subscriptions or services that renew once a year, like a membership with Amazon Prime or Costco, don’t set up automatic payments for these expenses. Even if you’re an organized person with an outstanding memory and a knack for writing everything on the calendar, annual expenses can catch you off guard. Since you don’t think about these bills on a regular basis, you might not remember the next due date, especially if you don’t receive a reminder.

When annual subscriptions auto-renew, you give the company or retailer permission to automatically charge your credit card or draft funds from your bank account on the next payment due date. If you don’t prepare for this expense, the company could draft your bank account when you don’t have enough funds in the account and cause an overdraft fee.

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About the Author

Valencia Higuera

Valencia Higuera is a personal finance expert who enjoys articles on budgeting, saving money and credit cards. She holds a B.A in English from Old Dominion University and currently lives in Chesapeake, Virginia.

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(Video) When Using Autopay Is a Bad Idea for Your Bills

FAQs

What bills should not be on autopay? ›

Don't use automatic payments for bills where the total fluctuates each time: think utility bills and cable bills that could end up being a different total each month. You should also avoid paying certain bills with cash—including utility bills.

Is it safe to pay bills with autopay? ›

Autopay is convenient, secure, and can even help to improve your credit score over time. However, not all bills should be paid with autopay.

What is the largest downside of setting up autopay to pay your bill? ›

And here are the disadvantages of setting up automatic payments. You face a risk of over-drafting. If you set up an automatic payment and don't have enough money in your bank account to cover it, you could overdraft your account. This could leave you facing high overdraft fees charged by your bank.

Should I put all my bills on autopay? ›

For this reason, experts suggest using autopay for every one of your credit card bills. As long as you know you have the expected money in your checking account each month (to prevent any overdraft fees), autopay is one of the easiest ways to streamline your finances and sleep better at night.

Does autopay hurt credit score? ›

In a word, no—automatic payments don't directly help your credit scores. When it comes to payments that are reported to credit bureaus, as long as your payment arrives on time, automatic payments don't affect your credit scores any more than if you'd dropped your payment in the nearest mailbox.

What is the safest way to pay your bills? ›

The safest method of payment for paying bills is to use a credit card. That's because a credit card number does not give anyone a way to get access to your cash. With a credit card number, they can make a charge on your account. But credit cards offer strong protections from fraud and unauthorized charges.

Why do people not use autopay? ›

Not having enough money in the bank is a main reason not to automate bill paying. If you have a bill set up to pay automatically and you lack money to pay it, this could affect your credit history as much as forgetting to mail in the check.

Is bill pay Better Than autopay? ›

When deciding which one is best for you, it's important to consider your own budgeting skills and financial habits. If you're just getting started with budgeting, bill pay is probably the better option. However, if you're confident in your abilities and want to save some time, auto pay might be the way to go.

Is it better to pay bills with credit or debit? ›

The bottom line. Be aware of any convenience fees you'll incur by paying your bills with credit cards. It's best to use credit only for products and services that won't charge a fee, and using cash, debit or bank transfer for the rest.

Is it safe to pay bills on your cell phone? ›

With the ability to track and lock your phone, as well as delete its data, mobile pay can be more secure than physical cash, and at least equally secure as a physical credit or debit card.

What is the smartest way to pay bills? ›

Paying by Direct Debit means your bills are paid on time, so you'll avoid late-payment charges. Some companies offer discounts for customers who pay by Direct Debit.

Which payment option is considered the safest? ›

4 Most Secure Payment Methods
  • ACH debit.
  • Debit and credit cards.
  • Payment apps.
  • eChecks.

Is it better to pay monthly or all at once? ›

Carrying a balance does not help your credit score, so it's always best to pay your balance in full each month. The impact of not doing paying in full each month depends on how large of a balance you're carrying compared to your credit limit.

Is it good to keep a zero balance on credit card? ›

If you have a zero balance on credit accounts, you are not proving that you can borrow and pay back the money borrowed. Having a zero balance will not hurt your credit, but it will not help. To understand how this came to be, it is important to understand credit and the history of credit agencies.

Does autopay have a fee? ›

Autopay reviews: Pros and cons

There's no fee to apply.

How many credit cards should you have? ›

If your goal is to get or maintain a good credit score, two to three credit card accounts, in addition to other types of credit, are generally recommended. This combination may help you improve your credit mix. Lenders and creditors like to see a wide variety of credit types on your credit report.

Which bills Should I pay off first? ›

With the debt avalanche method, you order your debts by interest rate, with the highest interest rate first. You pay minimum payments on everything while attacking the debt with the highest interest rate. Once that debt is paid off, you'll move to the one with the next-highest interest rate . . .

Is it better to pay bills weekly or monthly? ›

While nobody really looks forward to doing their bills monthly, much less even more frequently, experts agree that making weekly time for bills is a smarter way to go. Reviewing and paying bills on a weekly basis can save you headaches, hassles and keep you ahead of your financial goals.

Which method is the cheapest to pay off all your bills? ›

Pay off your most expensive loan first.

Then, continue paying down debts with the next highest interest rates to save on your overall cost. This is sometimes referred to as the “avalanche method” of paying down debt.

Should I make all my bills due on the same day? ›

You won't pay late fees

It can be frustrating to have to pay a fee, even if it's relatively small, because you forgot or were late making a payment. Paying all bills on one day allows you to stay on top of every bill and avoid those pesky late fees.

Why do companies push autopay? ›

Customers appreciate not having to remember to manually pay their bill each month, and they're more likely to be loyal to your business. Offering autopay tells the customer that you're thinking about their convenience. Continue to make their lives easier, and we promise: it'll make your business more efficient too.

Is it safe to use debit card for autopay? ›

With automatic bill pay, you can keep on time and avoid delinquency. It's secure. Data breaches make headlines, but online banking is no less secure than leaving a check in an envelope in an unguarded mailbox.

What is the safest way to pay with your phone? ›

A digital wallet — such as Apple Pay — is even more secure than a chip card because it doesn't use your actual card number for the transaction. As a security measure, your card information is only used in the initial setup of the wallet, helping increase mobile payment protection.

What is the safest way to pay over the phone? ›

Best Practices for Secure Over-The-Phone Payments

Never asking for a CVV/CVC number over the phone from customers. Using a secure phone line to protect the company against data breaches. Never storing card numbers or security codes, whether on paper or electronically.

Should I give my debit card details over the phone? ›

Never provide your credit card information to representatives who call you unexpectedly. Criminals can claim to be from your card issuer or bank and ask for your personal information. To this end, provide necessary card information only to merchants you've called directly.

What are the most common bills to pay? ›

Necessities often include the following:
  • Housing: Mortgage or rent; homeowners or renters insurance; property tax (if not already in the mortgage payment).
  • Transportation: Car payment, gas, maintenance and auto insurance; public transportation.
  • Health care: Health insurance; out-of-pocket medical costs.
  • Life insurance.
19 Oct 2022

What is the best bill pay? ›

July 5, 2022, at 12:24 p.m. Once upon a time you had to mail bill payments to your utilities, mortgage and credit card companies, vulnerable to the whims of the Postal Service.
...
The Best Bill-Paying Apps and Bill-Paying Software
  • Prism.
  • Quicken.
  • MyCheckFree.
  • Paytrust.
  • Mint.
  • PocketGuard.
  • You Need a Budget.

Where should you keep money to pay bills? ›

Savings accounts are a safe place to keep your money because all deposits made by consumers are guaranteed by the FDIC for bank accounts or the NCUA for credit union accounts. Certificates of deposit (CDs) issued by banks and credit unions also carry deposit insurance.

Is PayPal safer than credit card? ›

Is it Safer to use PayPal or a credit card? PayPal is at the top of the heap, security-wise. That's not surprising since it evolved with the web, and it has had to keep up with every fraudulent scheme that evolved with it.

What is the safest way to pay for an item to avoid debt? ›

If it is not feasible to pay for an item or service with cash, make the purchase with a credit card. To stay out of debt, make a plan for paying it down. Do pay the balance in full each month. Only make charges if you can pay off the entire credit card balance when it is due.

What is the 15 and 3 credit hack? ›

The 15/3 credit card payment hack is a credit optimization strategy that involves making two credit card payments per month. You make one payment 15 days before your statement date and a second one three days before it (hence the name).

How does the 15/3 rule work? ›

The 15/3 credit card payment rule is a strategy that involves making two payments each month to your credit card company. You make one payment 15 days before your statement is due and another payment three days before the due date.

What is the trick to paying off credit cards? ›

The 3 most common credit card payoff strategies
  1. Paying only the minimum. The least aggressive debt payoff method is making only the minimum payments. ...
  2. Paying more than the minimum. Paying more than the monthly minimum helps accelerate your debt payoff and is a more active approach. ...
  3. Using a balance transfer credit card.

In which 2 situations is autopay unavailable on recurring invoices? ›

Autopay works for both card and ACH transactions. Note: Autopay isn't available for recurring invoices with a Daily interval or for amounts over $5,000.

What is Biller not allowed? ›

This message indicates a rejection on the side of the credit card provider for unspecified reasons. In these cases, the card may be in perfect working order, but the bank will not approve this transaction. You will need to contact your bank for more information.

Why is my bank rejecting AutoPay? ›

Banks are likely to decline auto payments from April 1 as all recurring transactions using cards and prepaid payment instruments will now require an additional factor of authentication, as per an RBI circular first issued in December 2020. Transactions above ₹ 5,000 will require an additional one-time password.

Which 3 payment types can be used as an AutoPay method? ›

You can authorize an automatic bill payment to be made using your debit card, credit card, checking account, savings account or money market account. The amount due for the payment is collected automatically by the biller according to your payment schedule.

What is the difference between AutoPay and recurring payment? ›

Auto-pay is an automated process, which pays your balance in full each billing cycle 2 days prior to the due date, scheduled payments are manually entered by you for the date you choose each time you make a payment.

What is the safest way to pay monthly bills? ›

The safest method of payment for paying bills is to use a credit card. That's because a credit card number does not give anyone a way to get access to your cash. With a credit card number, they can make a charge on your account. But credit cards offer strong protections from fraud and unauthorized charges.

What is the best way to pay monthly bills? ›

Pay online or phone banking

If you bank online or by phone, you can pay your bills directly. It's quick and easy and you're in control of exactly what you pay and when, but you have to remember to pay your bills in time.

Is there a limit on bill pay? ›

There's no limit to the total number of bills you can pay. However, the steps need to be repeated if you pay more than five billers at a time. How do I add a biller for bill pay?>

What are blocked payments? ›

A blocked payment is initially authorized by the card issuer and could be processed successfully. Instead, Stripe does not charge the card as it's likely the payment is fraudulent and could result in a dispute.

What is AutoPay limit in Biller? ›

What is "AutoPay"? The 'AutoPay' option is a standing instruction that you can set up for a "View and Pay Bill" biller that you have registered for. You can also fix an upper limit for payments. Bills within this specified limit will get automatically processed for payment whenever they are due.

Why are companies pushing autopay? ›

Autopay offers tangible business benefits that include improving the number of reliable on-time payments, decreasing costs associated with checks and other customer service-supported payments, and boosting customer satisfaction.

Is it better to pay all at once or monthly? ›

Carrying a balance does not help your credit score, so it's always best to pay your balance in full each month. The impact of not doing paying in full each month depends on how large of a balance you're carrying compared to your credit limit.

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