Should I or Shouldn't I? That is The Autopay Question
For most people, gaining a few hours in the day would be a no-brainer, and setting up your bills to automatically deduct online might seem like a pretty attractive way to not only save time, but free up some mental space each month.
What is autopay?
Autopay refers to any automatic process that deducts money from your bank accounts and transfers it to the places where you owe money (utility companies, cable providers, student loan servicers, etc). Generally, any bill that you need to pay every month can be setup to autopay.
The benefits seem self-evident, but just because you can do something doesn't always mean you should. We'll take a look at some of the advantages of autopay, and some of the potential drawbacks to consider.
Pros of Autopay
- Convenience - No one can argue that not thinking about paying your cable bill is probably a pretty great benefit to your quality of life. Afterall, who wants to spend the time to either log in to an online portal or write out an actual check and find postage.
- Credit - One of the biggest ways to improve your credit score is to pay your bills on time. Setting up autopay is a great way to ensure that your bills are paid on time every month, since it removes the human error factor.
- Security - Paying bills online is still one of the safest ways to manage your money, especially if you live in an area with an unsecured mailbox.
Whenever you set up automatic payments, it's important to make sure you're very precise in your finances. Otherwise, you risk potential overdrafts to your account if something slips your mind, or you just had a tighter month than normal and forget that a payment is coming out of your account. Overdrafting is something to be cautious about since it can impact your credit so you'll want to make sure you have a pretty airtight system if you chose to go the autopay route.
You'll also want to make a habit of double checking your auto-payment withdrawals. While mistakes are generally rare, it's not unheard of and you won't want to find yourself on the wrong end of a auto-payment transaction error.
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