Autopay Your Bills

I wrote about checking your credit report a couple of weeks ago. One of the most common difficulties with keeping your credit report clean is making sure your payments are on time every time. One way of tracking them is setting up reminders, but that can get cumbersome. I am personally a big fan of autopay features. I have autopay set up for everything possible, starting with splitting my direct deposit payment between my checking and savings accounts so that I don't have to make a separate step to set savings aside. From there, I have autopay set up for my rent, credit cards, cell phone and internet bills, online and print subscriptions, car and renter’s insurance, monthly donations and investments, and recurring prescriptions and deliveries.

The main pitfall with autopay is if you don’t generally have enough money in your checking account to cover the payments. I set up my budget from the beginning to make sure that all of my recurring charges are covered, so my direct deposit split takes them into account. I still like to monitor my balance, as large or unexpected expenses can make the balance fluctuate, but for the most part I don’t have to worry that my account will be overdrawn.

Many vendors, especially ones that require large or infrequent payments, default to sending (or have an option to request) reminders before the money is withdrawn so that you have time to ensure there is money to cover the payment. If you aren’t sure if such payments are going to send you a reminder, set up your own!

Here are a few other things to keep in mind:

Some landlords charge an extra fee for paying rent online (which is how autopay is set up), so keep that in mind, as the extra fee may make it worthwhile to continue paying that bill manually.

Some of your subscriptions may require that you make selections or may be things you don’t actually want to get every time. One example of this is food delivery boxes. For these, you definitely need to make sure you log in before the deadline each week to change your selections or to cancel for the week. Another chance to use a reminder!

Car insurance and renter’s insurance are two examples of payments that are usually made every six months or even just once a year. These are the types of bills that happen so infrequently that if you do decide to set up autopay for them, you will need to also set up reminders (are you noticing a pattern yet?) or make sure the vendor notifies you in order to be sure your account will cover the payments when they come around.

Do you use autopay? Are there certain types of payments you prefer to pay manually?