6 Bills You Shouldn’t Put on Autopay, According to Financial Experts

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But what about paying your bills automatically using autopay?

What is autopay?

Autopay is an automated payment system that lets companies take money directly from your bank account or charge your credit card on a regular schedule to pay bills and expenses," says Rikin Shah, financial advisor and CEO of GetSure. "It's meant to make paying regular bills easier.

It’s a fantastic tool in your financial toolkit to simplify bill paying each month, but there are various factors to consider when choosing which bills to set up for automatic payments. First and foremost, use automatic payments to pay your regular bills only if you are absolutely sure you can afford to pay the full amount. “Otherwise, you may end up with a balance that will result in interest charges—and this could defeat the purpose of staying on top of your bills,” says Dana Marineau, Credit Karma’s former Vice President of Communications and Brand. “If you’re not positive you can pay in full, it’s best to avoid autopay.”

You may especially want to reconsider paying the following bills automatically.

1. Annual subscriptions

.

2. Utility bills

—including utility bills.

3. Broadband and internet

Be wary of setting up automatic payments for your internet and broadband bills, thinking they're a fixed charge every month. In reality, internet pricing isn't regulated by the government, so companies can increase costs at any time. To save money, it's best to regularly check your bill to ensure you're not being charged more than expected. This is especially important if you initially signed up for a promotional rate, as Shah points out. "[Those rates] typically expire after 12 months, so reviewing your bill allows you to either renegotiate your rate or find a better deal," he notes.

4. Credit card bills

.

5. Auto insurance premiums

You might end up paying a penalty. Your rates and coverage requirements can change often, so be sure to review the specifics each time your policy renews, rather than just letting it continue automatically without thinking about your possibilities. "Statistics show that if you shop around at renewal time, you might be able to get a lower rate," Shah says.

6. Memberships

Make sure that your automatic payment for that big-box store you joined or the zoo through your family membership isn't set to renew automatically. Many of these memberships have autopay enabled, and before you know it, you'll be signed up for another year, even if you don't intend to use it.

- The deaf, elderly, financially impaired and physically hindered may be reluctant to adopt AutoPay are threatened by insecurities related to banking and financial information security with potential issues brought up.

Setting up automatic payments can make paying bills more manageable, but it's generally a good idea to limit it to bills with fixed amounts that don't change, such as mortgage and car payments. "This helps prevent overdrafts when unexpected increases occur," warns Shah. In addition, you'll want to consider the following:

• "This gives you more flexibility if you need to dispute a charge before it comes out of your checking account," says Shah.
• Check your statements regularly to ensure auto-paid amounts are correct. "It's good practice to review your accounts at least once a month for any discrepancies or questionable charges," says Shah.
• Set reminders on your calendar to review your account balances before autopay dates, so you can deposit more money if needed and prevent overdraft fees.
• "Set aside a specific time slot on your calendar and aim to incorporate it into your regular routine," says Marineau.

Additional reporting was provided by Stacey Marcus.

About the experts

• He is the Chief Executive Officer of GetSure and a financial services consultant. With over 20 years of experience in the financial services industry, he has held various positions, including investment banking at J.P. Morgan, private equity investing at Stone Point Capital, and Head of Business Operations for Earnest, a student loan refinancing startup.
• They are currently the Chief Marketing Officer at Rakuten and formerly held the position of Vice President of Communications and Brand at Credit Karma.

Sources:

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