Autopay Is Making Us Worse at Managing Credit-Card Bills
Setting up automatic payments is the easiest way to manage your credit-card bills. It is also costing many consumers money. By setting up automatic payments, or autopay, you authorize companies to pull money directly from your checking account to settle recurring bills. It has been a standard feature for fixed expenses, such as cable, for more than a decade and is becoming more popular for bills that fluctuate from month to month, like credit cards.
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In theory, higher autopay enrollment should lead to reduced credit-card fees since customers who sign up for automated payments are less likely to forget to pay and thus can avoid late fees and interest charges. Yet the total fees and interest paid by cardholders rose 19% to around $240 billion from 2015 to 2020, according to federal data.
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When credit-card customers sign up for autopay, they typically have three options for monthly payments: the required minimum, the statement balance in full or a custom amount. Most people who enroll in autopay choose either the minimum payment or full balance, said Wang. Those who pick pay in full when they set up their automatic payments are more likely to change their settings within the first 10 months since this option is less affordable in the long term, her 2022 study for the National Bureau of Economic Research suggests. Those who pick minimum payment tend to keep that setting.
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The only surefire way to avoid fees and interest charges with autopay is to pay off your balance in full. But that only works for people with reliable income and steady spending habits. Overdraft fees can offset any savings from late fees if you spend more on your credit card than you have in your checking account. You can avoid overdrafts by scheduling your automatic payments on days you are paid instead of using the default statement date, Wang said.
There is also value in paying your bill the old-school way, manually, according to financial advisers. Actively managing your account helps you stay on top of your spending and spot any fraudulent charges.
https://archive.ph/4IyOF
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Big Blue Marble
(5,415 posts)good money management means reviewing and reconciling your charges and payments each month.
Managed well, autopay safes time and stress.
jimfields33
(17,887 posts)You never go over your limit.
Frasier Balzov
(3,362 posts)You set up AutoPAY at your own bank. Turn it off whenever you want.
You set up AutoPULL at the merchant. Beg them to turn it off and witness if they honor your request or have any incentive to do so.
multigraincracker
(33,549 posts)Carry no balance on any CCs, pay them off monthly. I go to the internet provider and Verizon and pay cash every month. They have machines there that take cash and it kicks out the receipt
The only other bill is my combined gas and electric that I mail a check that I send from the Post Office.
Paid off my house when I retired 21 years ago. Have moved twice and paid cash for those 2 houses. Paid off my last car note in 1982 and have bought all my cars with cash.
Im really old school, I dont bank on line. Burnt once and never again. I now bank in line, I stand in line at the bank and all of the tellers know my name.
I sleep good.
lastlib
(24,275 posts)Having never done banking or bill-paying online, I've never been hacked. While I do shop with a credit card (and NOT a debit card! only use that for ATM transaction at my own bank) online, I watch that card religiously! At first sign of a hack or theft, account gets closed, and I get a new one. But I've never had to--I'm pretty fastidious about using trustworthy sites (I don't consider Amazon as trustworthy.)
progree
(11,389 posts)Me neither. I ordered a new computer monitor with speakers. I got a different cheaper model without speakers. And the box has a sticker on it "refurbished".
Here's what the skankwads at "Emma's Market", who fulfilled the order say in part:
Since we are just a reseller on Amazon, but not a manufacturer and most of our orders are directly shipped from our manufacturers warehouses including your order. We could totally understand your feeling. ((I'm supposed to believe that Dell sent a refurbished cheaper model -Progree))
1.Please return the item back to us and we will process a full refund back to your account so you can purchase the correct model from another seller. The return label is pre-paid. ((In other words fuck you, bwahahaha, good luck finding an honest seller -Progree)).
2.Or if you need this product urgently, you could also keep that item rather than return it, we would like to provide $30 as a discount for this order. According to Amazon policy, this is the maxmum parial refund for this order without a return request.
If you look at their profile,
https://www.amazon.com/sp?ie=UTF8&seller=A1EP53GHT90KIF&asin=B09SQWP476&ref_=dp_merchant_link
"Women & Veteran-Owned Small Family Business since 1998."
that sounds wonderfully wonderful and all that but...
question everything
(48,423 posts)progree
(11,389 posts)before finding out its flaws. Its just not worth my time to repeat this process all over again.
That one can deliberately be shipped a refurbished inferior model and hey, its OK, I can just return it, assuming I get it packed up just right (I even took pics as I was unpacking it). No its not OK.
The 3rd party seller tried to bribe me with $50 to remove my negative review. Sorry, but my integrity is worth more than $50. I'm not a Republicon.
This all sucks to high heaven IMHO.
Edited to add: this isn't the first time I've had a problem with a 3rd party seller who attempted to cheat me (it wasn't an honest mistake based on the dialog I had with them).
Another edit - I read in AARP Bulletin that Amazon chooses 3rd party sellers based on them agreeing not to sell elsewhere. Very monopolistic and skanky.
question everything
(48,423 posts)I dont like it. We have an Apple store in the neighborhood and we should be able to get the best product and support. Your notes settled this.
progree
(11,389 posts)its better to shop with a trusted local store.
BTW, that's a great post you wrote about DU4
PoindexterOglethorpe
(26,105 posts)But I do pay off the full amount each month. If it's a (for me) high payment, I might transfer money from my savings account to the checking account to cover it.
I actually go on line and look at my checking account every couple of days to make sure everything is as I want it. I suppose that counts as actively managing my account.
Most of my other bills are on auto pay, or get charged to that Visa card. Back when I paid everything by check, I really hated writing out those checks, tended to put off the chore, and so all too often bills got paid late. Now, nothing is paid late. Much nicer.