Is Autopay a good or bad thing?

[mitchblue]

I keep an eye out but if not for auto pay I'd be in big trouble. I don't want to have to micro manage all my accounts. Just too many.

[nwa479]

I don't use autopay for any of my credit cards, but do use it for bill payments such as utilities, insurance, or streaming services.  One reason I don't on the credit cards is that I prefer to pay well in advance of the due date.  I don't trust auto-pay enough to set it to pay on the due date. 

At least twice a month, I check each card and make any payments due within the next two weeks.  I have a spreadsheet I use to track everything.  I check all cards weekly and alerts are setup on them to email me when the payment is posted.  

[Roisin]

I setup autopay for a small auto loan payment when I was just starting to build credit. At the time, my credit was basically non-existent and I was too afraid that I'd forget to pay on time, or, as others mention here, that some emergency would prevent me from following through. The auto-payments brought me great peace of mind, and I never had any problems. Other than that, the only autopay I've used is for a lease-to-own instrument that I wasn't able to purchase outright and convinced myself that I just "had to have." Otherwise, I manage and pay all my personal accounts, and often make more than one payment per month. I'm not going to write that I've never missed a payment because the moment I write such a thing, the dreaded life-altering event will happen, and a short-but-exceptional payment history will no doubt instantly unravel ... 

FWIW, DH manages utilities and house accounts and never uses autopay because he doesn't "trust" the systems to work.

[LADave]

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@NoMoreE46 wrote:

Customers who are on automatic payments pose half the risk of customers with similar credit who aren’t on autopay, said Max Axler, chief credit officer at Synchrony Financial, which services more than 70 million credit-card accounts.

After hearing about this article, I immediately made sure my Synchrony accounts were on autopay, even though I manually pay them all early anyway. I don't want to be denied either a CLI or new credit with them just because I decided to be a stickler for paying more than my minimum before the due date. 😂

[Thomas_Thumb]

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@NoMoreE46 wrote:

This Wall Street Journal article is sponsored through MSN Money:

Autopay Is Making Us Worse at Managing Credit-Card Bills (msn.com) 

What are your thoughts?

Selected Excerpts:

The share of credit-card accounts enrolled in these automatic payments roughly doubled between 2015 and 2020 and continues to rise, according to data from the Consumer Financial Protection Bureau, or CFPB, and industry executives.

 Borrowers who use autopay pay off between 8% and 17% less of their monthly credit-card balances compared with customers who make manual payments, according to the study.

Customers who are on automatic payments pose half the risk of customers with similar credit who aren’t on autopay, said Max Axler, chief credit officer at Synchrony Financial, which services more than 70 million credit-card accounts.

While autopay enrollment has no direct impact on credit scores, being perceived as riskier by your bank could make it harder to get approved for more credit or lead to reduced credit limits, according to financial advisers.

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Autopay is just a tool. Neither good or bad. I don't use it. However, If I did I would set it up to do minimum payments on credit cards. Basically, use it as a stop gap against a late in the event I overlooked a bill.

We did use autopay on our mortgage and would have on an auto loan but, we always pay cash for vehicles. It is convenient for reoccuring bills of a fixed amount that should be baked into any spend plan.

[LADave]

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@Thomas_Thumb wrote:

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Autopay is just a tool. Neither good or bad. I don't use it. However, If I did I would set it up to do minimum payments on credit cards. Basically, use it as a stop gap against a late in the event I overlooked a bill.

We did use autopay on our mortgage and would have on an auto loan but, we always pay cash for vehicles. It is convenient for reoccuring bills of a fixed amount that should be baked into any spend plan.

 It's probably no surprise to anyone that credit card companies like customers who pay on time but don't always pay in full, and autopay generally helps with that.

I already had almost everything on autopay for a minimum payment, in case of a worst-case scenario where I've either forgotten to make a payment or I'm unable to (such as if I was in the hospital). 

The biggest surprise to me in the article was the prospect that banks in general (and Synchrony in particular) could see me as a higher risk by not having autopay set. I didn't have it set on a Synchrony account that's currently on 0%, where I'm paying more than the minimum to get it paid off faster. After reading it, I decided I might as well just do it.

[CorpCrMgr1]

I have subscribed to auto pay for years. I generally PIF every Monday/Tuesday. Yes, four times or so a month. Auto pay is my backup set at the minimum payment. I always recommend auto pay to others. I do understand though how some not PIF may have reservations 

[HiiiPoWeR]

I watched a short interview on CNBC with a bank executive who said that people who do not have autopay enabled are perceived as a higher risk to the bank. If you have autopay enabled but then decide to opt out later, the bank will monitor your accounts more closely. I don't know how true this is or if I really believe it, but it's possible. (If I find that interview, I will link it here.)

Personally, I prefer to use bill pay for most of my bills because it gives me more control over the payments. I have my bill pay set up to send a payment if the balance is lower than $3,000 because that is typically what I spend on my main card. If the bill comes in higher, then I receive a notification that my balance is higher than usual and will have to manually initiate the payment. Also, I check my bank account often; almost every day I am making some transaction with my bank account, so it makes sense for me to have everything in one place where I can see it at a glance. When the statement gets cut, it's immediately available in bill pay; sometimes, bill pay will send me the statement before the statement is posted on the creditor's site. If an account number changes, bill pay automatically updates with the new one. It's pretty much seamless.

Another benefit of using bill pay over autopay is that you don't have to worry about covering late payment penalties because some banks offer bill pay guarantee. If the bank does not properly complete a bill payment on or before the “Deliver by” date, they will pay any late fees or finance charges directly caused by a delay or error on their part.

I say do what makes you feel the most comfortable. I'm just sharing what works for me. 

[CorpCrMgr1]

@nwa479  do any of your utilities charge a CC use fee? My water bill charges a fee. Six times a year I write a check to the water department. Property taxes also have a CC surcharge. Again a check twice a year.  

I don't completely trust auto pay. That's why I pay my cards weekly. 

[ptatohed]

Wow, I guess I am the only one here who has all their cards set to auto pay in full, and have never had any issues.  I couldn't live without it!  In fact, it's often a requisite for mrs. ptatohed giving me the ok for a new card.  "As long as you set up auto pay and I don't have to worry about it".  lol