Setting bills on autopay can simplify your finances — no more missed payments, late fees or overdraft charges. However, this convenience comes at a cost if you’re not careful.
Before putting all your bills on autopay, make sure you’re not making these common mistakes.
1. Putting the Wrong Bills on Autopay
While autopay is convenient, not every bill should be included. Fixed bills like rent and mortgage payments are safe to automate because the amounts remain the same each month. However, variable bills, such as utilities, subscription services and medical expenses, should not be on autopay.
A forgotten subscription or an incorrect medical charge could go unnoticed if the bill isn’t reviewed before payment. Instead of automating every bill, use autopay for fixed expenses and manually pay variable ones.
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2. Not Ensuring Enough Funds To Cover Bills
Autopay works best when you have sufficient funds in your account. Otherwise, you risk overdraft fees or missed payments. Many people assume they will always have enough money, but life is unpredictable. An emergency expense could arise or your paycheck could be delayed.
To avoid this, regularly check your balances to ensure you have enough money to cover automatic payments. You can also set up low-balance alerts to avoid surprises.
3. Not Reviewing Bills Regularly
One of autopay’s biggest drawbacks is that it makes it easy to forget about bills. If you don’t review them regularly, you could be paying incorrect charges or experiencing unexpected rate increases without realizing it.
Ignoring your bills could also mean paying for subscriptions you no longer use. That’s why it’s essential to review your bills at least once a month.
4. Forgetting To Update Payment Methods
Expired credit cards or updated billing details can cause autopay transactions to fail. While most banks notify you of a failed payment, many people don’t realize a bill didn’t go through until it’s too late.
Whenever you switch banks or receive a new credit card, update your payment details to avoid unnecessary fees. Setting reminders for credit card expiration dates can help prevent missed payments.
5. Using a Single Account for Autopay
Linking all your autopay bills to one bank account or credit card can be risky. If your account balance runs low or your card is declined, multiple payments could fail, leading to overdraft fees or service disruptions.
To reduce this risk, spread autopay bills across different accounts when possible. Using multiple financial institutions can also provide an added layer of security.
6. Not Setting Up Payment Reminders
Many people set up autopay and forget about it. Without reminders, you might not notice a failed payment, a rate increase or an unnecessary charge for a service you no longer use.
Setting alerts for upcoming payments, low balances and failed transactions can help you catch issues before they become costly problems.
By avoiding these common mistakes, you can take full advantage of autopay’s convenience while keeping your finances in check.
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This article originally appeared on GOBankingRates.com: 6 Mistakes People Make When Putting Bills on Autopay
