Autopay Isn’t Always Safe: 5 Bills Worth Double-Checking
One of the most commonly cited personal finance strategies is to automate bills through autopay. This "set it and forget it" approach keeps you from missing any payment deadlines and makes it easier to manage your overall expenses.
While you can automate most bills, it's not always in your best interest to automate all bills. Here are five you may regret putting on autopay.
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1. Utilities
Though it may seem like a good idea to put utility bills like water, gas and electric on autopay, it's important to remember these are not fixed expenses. A fixed expense, like rent or a mortgage, is the same each month.
Utilities are considered variable expenses because they fluctuate every month depending on your overall use. And if you have a particularly high-use month, you could be at risk of an overdraft and overdraft charges.
The safe approach for paying these bills is to sign into your account each month, review the statement to identify any unusual price increases or errors (and discuss with your utility provider, as needed) and make the payment afterwards.
2. Credit Cards
Some may argue it's a good idea to automate credit card bills, especially if you want to improve your credit score by paying your balance in full.
The savvier approach, however, is to manually pay a credit card. Review your statement carefully to see if there have been any charges you don't recognize and can dispute with your provider, or to see expenses that hiked up your bill this month that can be cut back or eliminated entirely next month.
3. Internet
At first glance, your internet bill may appear to be a fixed expense that's worth putting on autopay. However, the internet is actually a variable expense. If you have a promotional rate, it tends to expire quickly and lead to higher charges, often without any notifications to the customer.
Like utilities, it's better to review your statements each month and make payments afterwards.
4. Streaming Services and Cable
Cable and streaming services typically increase their rates each year, which they may or may not notify customers about. Plus, if you're enjoying a free trial from a streaming service, you'll need to be aware of the date the trial expires to avoid any future charges.
Take a moment to review these statements to see what has increased in price and decide if you want to keep the plan you're on. Renegotiate with the provider or cancel your subscription, if necessary.
5. Medical Bills
Medical bills should never be put on autopay due to their complexity. Many statements contain billing errors such as services that haven't been covered or duplicate charges. Failing to review these statements before their automated payment is processed could lead to overpaying by hundreds of dollars.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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