6 Bills You Shouldn’t Put on AutoPay
Putting your bills on Autopay is a simple and seamless way to budget each month. Before you click "autopay" consider the balances and bills that don't make sense to streamline.
Paying your bills online has many benefits like avoiding late fees, reducing paper bills and adding security, but what about putting your bills in the queue using Autopay?
Regardless of the type of bill being paid Credit Karma‘s Dana Marineau, VP of Communications and Brand recommends only using automatic payments to pay your monthly bills if you’re confident you can afford to pay in full. “Otherwise, you may build up a balance that will charge you interest—and that could undermine your efforts to stay on top of your bills. If you aren’t confident you can pay in full, avoid autopay,” says Marineau.
In particular, she cautions to avoid paying these bills on autopay:
Annual subscriptions or auto premiums
You shouldn’t have infrequent bills on autopay, like an annual subscription or semiannual vehicle insurance premium, because you’re likely to forget about them. If one of those bills hits your account when your balance is low, you may end up overdrawing your bank account and getting hit with a fee. Or you may be getting charged for it without even realizing it if you don’t check your statements diligently.
Utility and cable bills
You also shouldn’t autopay 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 utility and these other bills with cash.
Credit card bills
Credit card bills can present challenges when it comes to automatic bill pay because you’ll want to cover at least the minimum amount due, which you may or may not have enough money to pay more every month. Also, do not use your credit card to pay these bills.
Lastly, any temporary charges, like memberships or subscriptions, should not be on autopay to ensure you’re only paying for the time you used them. If you sign up for a trial of service but forget you’re paying since it’s on autopay, you may be shocked when you finally look at your credit card bill later on to find you’ve been paying for a service you weren’t using.
In order to pay each bill on time and ensure you aren’t overspending, it’s sometimes helpful to set aside a regular, recurring time to pay your bills. Schedule a block of time on your calendar and try to make it part of your routine. Marineau recommends that you set up alerts every time a payment is taken from your bank account so you know what is being spent, whether it’s done manually or automatically. You’ll also want to know the best time to pay your bills.