Autopay can make your life easier when you have recurring bills. It’s not, however, a perfect solution. Moreover, it has been used in some less than ethical ways. Reports have shown up to 35 percent of U.S. consumers have been signed up for an autopay subscription without knowing it.
So, is autopay really a good idea?
It’s More Convenient
Maybe the top reason people decide to sign up for autopay is the fact it makes life so much easier. Here are a few of the ways it can simplify your life:
- You don’t have to worry about forgetting any bills. When you have a lineup of accounts you need to pay every month, it’s easy to forget about one of them. This is especially true when you have accounts that are charged annually or semi-annually. In such an instance, autopay makes it less likely you’ll get charged for making a late payment.
- You save time. The more tasks you can automate, the more time you can spend doing things important to you instead of attending to those aggravating details.
- You don’t have to write any checks or mail anything. Writing checks feels very outdated in today’s world. This is especially true when paying bills, as writing a check takes more time and requires postage. Plus, there’s always a chance it might not arrive at the intended destination on time.
Cost Reductions — On Both Sides
Autopay reduces administrative costs, while keeping cash flow consistent and organized. Due to this, there are sometimes additional benefits offered by enterprises that want to entice you into signing up for autopay.
Maybe this will be a slight reduction in costs on your bill, or waiving certain processing fees. It’s a good idea to see if a business offers any of these bonuses when you’re considering signing up for autopay.
Bills Can Get Out of Hand Easier
Now that you’ve seen the primary benefits of signing up for autopay, it’s important to consider some of the downsides as well. One major point to consider is you can become disconnected from your finances if you have all your accounts on autopay.
There’s a particular danger of this because of the large number of subscription services available to the public. The average U.S. streaming subscriber has 3.4 streaming services. With autopay, you’ll continue to be charged for those services even if you’re barely using them.
When you let your debts get a little bit out of hand, that can quickly lead to them getting way beyond your control. In situations like this, you might want to look at a debt relief program. Agencies such as Freedom Debt Relief have a long history of helping consumers who end up over their heads in debt.
You Might Not Notice Billing Mistakes
Believe it or not, big companies make mistakes. Unfortunately, they’re more likely to call you out for billing errors than recognize their own.
When your bill is on autopay, you might not take the time to give it a look-over the way you would if you pay manually. What if there’s a huge mistake on your bill? This could end up costing you hundreds of dollars if it’s not addressed and fixed in a timely manner.
One of the main ideas behind signing up for autopay is you’ll be able to avoid fees. However, they can still find you even if you have autopay on. Overdraft fees are one of the most common ways for this to happen. When you have autopay on, your account will have money pulled from it even if the balance is low. This can lead to a scenario where you end up paying overdraft fees.
So, is autopay really a good idea? It’s great for simplifying your life, but there are drawbacks to consider. Be sure you understand the pros and cons before enrolling.
Feature Photo by Micheile Henderson on Unsplash
