6 Bills to Avoid Autopay, Says Experts

Understanding Autopay and When to Use It

Paying your bills online offers numerous benefits, such as avoiding late fees and saving money, reducing paper waste, and enhancing security. However, one of the most convenient features available is autopay. This automated payment system allows companies to withdraw funds from your bank account or charge your credit card on a set schedule to cover recurring bills and expenses.

Autopay is designed to make managing monthly bills more efficient, but it’s important to consider which bills should be set up for automatic payment. Before setting up autopay, ensure you can afford to pay in full each month. Otherwise, you might accumulate interest charges that could complicate your financial situation. If you’re unsure about your ability to pay, it's better to avoid autopay altogether.

Bills to Avoid Autopay

There are several types of bills where autopay may not be the best choice. Here are some examples:

1. Annual Subscriptions
   Subscription services like magazines, streaming platforms (e.g., Netflix, Hulu), or other recurring services should be avoided on autopay. Many people forget they're still subscribed and continue paying for services they no longer use. A recent survey found that 42% of consumers keep paying for subscriptions they no longer need. These hidden costs can add up significantly over time.

2. Utility Bills
   Utility bills, such as electricity or gas, often vary from month to month due to usage fluctuations. It’s essential to review these bills regularly, especially during peak seasons like winter or summer when energy consumption tends to increase. Billing errors are also common, so checking your bill before autopay is crucial.

3. Broadband and Internet
   While internet bills typically have a fixed cost, this isn’t always the case. Since broadband pricing isn't regulated, providers can raise rates at any time. If you signed up for promotional pricing, it’s wise to check your bill each month to ensure you’re not overpaying. Reviewing your bill can also help you find better deals or renegotiate terms.

4. Credit Card Bills
   Credit card payments require careful management. You must cover at least the minimum amount due, and you may not always have enough funds to pay more. It's important to know which purchases you should and shouldn’t make with a credit card to maintain good financial health.

5. Auto Insurance Premiums
   Auto insurance premiums are usually paid once or twice a year, which can result in large payments. If your account balance is low when a payment hits, you could face overdraft fees. Additionally, your coverage and rates may change, so it’s important to review your policy at renewal rather than relying on autopay.

6. Memberships
   Gym memberships, store memberships, or zoo memberships often come with auto-renewal clauses. Before you know it, you could be paying for a service you no longer use. It’s best to manually manage these payments to avoid unexpected charges.

Tips for Using Autopay Effectively

If you decide to use autopay, there are some key considerations to keep in mind:

• Use a credit card instead of a debit card for autopay. This gives you more flexibility if you need to dispute a charge.
• Review your statements regularly to ensure the amounts being charged are correct. Checking your accounts at least once a month helps catch discrepancies or fraudulent activity.
• Set calendar reminders to check your account balances before autopay dates. This ensures you have enough funds to avoid overdraft fees.
• For bills not on autopay, set aside a regular time to pay them manually. Scheduling a block of time on your calendar can help turn bill paying into a routine.

By carefully selecting which bills to autopay and following these guidelines, you can enjoy the convenience of automated payments while maintaining control over your finances.