Although paying your bills on autopay is seemingly hassle-free, a few drawbacks may occur. Here are some that should always be handled manually and the possible outcome of not doing so.
1. Paying for Cable
Paying for cable on autopay isn’t ideal because the bill goes up more often than one might think, and being on autopay may make it difficult to track.
2. Cell Phone Bills
Unsurprisingly, cell phone plans have changing variables, including service fees and taxes. Therefore, cell phone bills might likely increase, particularly with the high use of data. As a result, this increases the risk of accidental overdrafts.
3. Paying Your Bills for Entertainment
While some people still have a cable bill, many have one, if not all, streaming services. And let’s face it, there are a lot of them. As such, paying your bills like Netflix or Disney streaming services on autopay makes it difficult to track which sites you’re paying for.
4. Utility Bills
Utility bills should also be paid manually as they fluctuate depending on variables like the seasons.
5. Paying Your Bills for Subscriptions
Monthly subscriptions and free trials can be great for convenience. However, it’s essential to ensure autopay or autorenewal isn’t marked as this can cause unexpected or undesired packages to arrive, creating an excess of products. Moreover, subscriptions and free trials can become costly when customers are locked in for a yearly contract.
Reasons for Not Paying Your Bills on Autopay
Numerous reasons exist for why paying your bills on autopay isn’t always a great idea. Firstly, closely monitoring your account activity can help you note and attempt to reverse any system error. Secondly, manually paying some of your bills can help minimize the risk of fraudulent activity because you can track how much each transaction should be, and how many there are. Lastly, it allows you to track monthly expenses and avoid accidental overdrafts.
Upside of Paying your Bills on Autopay
In contrast, there’s a lot to love about paying your bills on autopay. For example, it’s more convenient than remembering all the dates payments are due or referring to a calendar. Additionally, there’s no worry about forgetting and paying a late fee. Lastly, it saves time because there’s no need to spend time out of a busy day trying to pay your bills. Therefore, the best thing to do is find a way to “responsibly” use autopay.
Achieving a Balance
The first thing to do is to find a balance between using autopay and tracking as much as possible without feeling overwhelmed when paying your bills responsibly. This means prioritizing the bills you must manually pay and allowing room for some autopay options. Secondly, signing up for autopay in multiple accounts is only a good idea if the cost is guaranteed to be the same each pay period. Thirdly, set up electronic alerts so you are notified by text or email of any charges or withdrawals that have been made.
Lastly, average your monthly expenses. If they’re generally around the same amount each month, having a safety net is another great idea if it’s possible. For example, if your monthly utilities add up to around $200 per month, always having at least $300 in there will prevent accidental overdrafts. Sadly, this suggestion may not be an option for families living paycheck to paycheck, but for those who have a little extra, this might be the thing that saves you from an unexpected overdraft.
Always Double-Check
Paying your bills on autopay can be more convenient. However, without frequent monitoring, things can become a hassle. From waiting on hold to get in touch with the bank to contacting every company associated with your account, making a mistake could be time-consuming and costly. As a result, the most important thing is to monitor your recent transactions, whether you’re paying your bills manually or automatically. That way, you’ll always know what’s happening with your hard-earned money.
Sources: theheartysoul.
References:
- “Here’s when you should — and shouldn’t — use autopay for your bills.” CBS. Megan Cerullo. August 24, 2023.
- “Automatic Bill Payments: Pros and Cons.” Nerd Wallet. Melissa Lambarena. September 28, 2018.
- “If You Have These Bills on Autopay, Take Them Off Immediately.” MSN. Lacey Muszynski.
