8 Bills You Should Always Put on Autopay
Autopay is a great way to streamline your bills so you avoid late fees, raise your credit score, save money and time, and never miss a payment.
When was the last time you took a serious look at the stack of bills you pay on a regular basis? Whether it is your mortgage, car payment, student loan, or streaming subscription, you probably have several recurring bills that need to be paid on the same day each month for a fixed amount. Does it make sense to put all these bills on autopay? We reached out to Ted Rossman, industry analyst at CreditCards.com for his expert opinion. You might also be interested in learning how to make a budget for yourself each month, too.
The advantage of putting streaming subscriptions on autopay is that you can avoid service interruptions and late fees while earning credit card reward points. In fact, you may have already done so without even knowing it, Rossman says. “Our national telephone survey of 1,000+ adults in the United States found that 35 percent had set up an account, such as a streaming TV service, a magazine subscription, or a gym membership, that enrolled them in automatic payments without them realizing it,” he shares. One caveat: In the same survey, 42 percent of consumers said it’s difficult to turn off recurring charges. In addition, you’ll want to check your credit card bill regularly to make sure the cost of your subscription didn’t sneakily rise on you.
Earning credit card rewards, avoiding service interruptions, and late fees are the prime benefits of putting gym memberships on autopay. Similar to your streaming subscriptions, Rossman notes that you need to pay attention to the rate you’re being charged monthly to avoid blindly paying more. Here are more things you should always pay for with a credit card.
By putting your cell phone bill on autopay, you can earn credit card rewards and avoid service interruptions and late fees. Plus, many credit cards offer cell phone insurance if you pay your monthly bill with a card, says Rossman. Learn why you should consider paying your bills on the same day.
While Rossman put daycare on the list of bills to always put on autopay, he cautions to watch out for credit card surcharges that would outweigh any reward benefits. Putting your daycare bill on autopay allows you to avoid late fees.
Credit card surcharges are common on student loans so you’re probably better off setting this bill to autopay from your checking account, says Rossman. He adds that it’s worthwhile to do so to avoid late fees and credit score damage, pointing out that student loans directly appear on credit reports unlike many of the other bills on this list. Learn how to pay off student loans in less than five years.
Car loan or leases
There are several reasons to put your car loan or lease on autopay: Not only does it helps you avoid credit score damage and avoid late fees, but if you were to miss a couple of payments your car might even be repossessed, says Rossman. He notes that credit cards are often not accepted as payment for a car (or if they are, there’s likely a surcharge), so you’re better off paying with a checking account. Find out if it’s better to lease or buy a car.
Autopayments of your mortgage are a no brainer as, if you have a fixed-rate mortgage, the amount won’t change for decades. Prompt, regular payment of your mortgage helps you help avoid late fees and damage to your credit score, and missing too many payments could land you in foreclosure proceedings, says Rossman. Most mortgage servicers won’t directly accept a credit card (and third parties charge processing fees), so you’ll want to pay it from your checking account.
Car and home insurance
In addition to the regular reasons to put this bill on autopay (earning credit card rewards and avoiding late fees), there’s often a discount for paying in full and on time.
The fine print
“Autopay can be a useful backstop to avoid late payments, but it’s not a cure-all,” cautions Rossman. While it does help keep you organized and save you from paying late or missed payment fees, you don’t want to be so hands-off to the point where you’re getting taken advantage of, says Rossman. “An increasing number of credit card issuers offer extra rewards points for habitual services like streaming and cell phone plans, because these often become ‘set it and forget it’ purchases.” That’s why it’s still important to review your bills every month to make sure there are any additional sneaky charges or fees for products you didn’t sign up for.
On the other hand, these are the bills you should never put on autopay.
- Ted Rossman, industry analyst at CreditCards.com