7 Reasons Not To Use Autopay for Your Bills
Written by
Martin Dasko
Edited by
Ashleigh Ray
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
When you organize your finances, you’ll likely place many of your fixed expenses on autopay, so you don’t have to make your payments manually.
Putting your expenses on autopay will simplify your financial life and provide convenience. By having your accounts on autopay, you also don’t have to worry about late fees or hurting your credit score.
With that being said, there are still some negatives to using autopay that you should consider. What are the downsides of autopay that nobody talks about?
You Forget About a Fixed Expense
Here’s a common scenario: You sign up for a gym or test out a new app on your phone. You leave your credit card as an autopay option and continue with your life. Then, a few months later, you notice your credit card bill is higher than expected. You’re not sure why — until you see that new expense you forgot about.
This has likely happened to most people at some point. Autopay can easily allow you to forget about auto-renew and about the expense in general. Forgetting about new expenses could lead to your monthly budget getting ruined.
You Forget To Cancel a Subscription
When you manually have to pay for something, you have a moment to reflect on your purchase. With autopay, it’s easy to completely forget about all those expenses. If there’s a subscription that you just wanted to test out for a few weeks, or if you didn’t realize that the trial was over, you could end up getting stuck with it for much longer than you anticipated.
These days, it’s easier than ever — with online retailers and smartphones — to add a subscription. This means that a simple weekend trial of a new app could lead to an expense that hits your credit card for the next few months.
You Could End Up Spending More Money
As you place a bunch of expenses and subscriptions on autopay, it’s easy to let your monthly spending increase. You may even have a false sense of financial security, since you don’t have to even input your financial information — your phone may have that all stored already. As you place various new expenses on autopay, you may not realize that you don’t have the funds in your account to cover them.
Simply put, autopay makes it easier than ever to spend money without even noticing it. You don’t want to throw off your monthly budget because you feel a false sense of security when shopping.
You Run the Risk of Overdrafts
If you don’t have the funds set aside, you could find yourself going into overdraft, since the renewal has been set to come out of your account automatically. It’s easy to forget the different due dates for payments on your account. If you have a phone bill or autopay expense that’s more expensive than usual, or if your paycheck arrives late, your account may not have the funds to complete the transaction.
Potentially even worse than going into overdraft is that your bank could deny the transaction, which would lead to other issues.
Potential Billing Issues
You could still have a billing issue with autopay, because the gym could charge you twice, or you could go over your allocated usage. Since you have the payments on autopay, you could miss that you were overcharged or that there was a billing issue.
If you miss a billing issue, you could find yourself with a higher credit card bill, which could lead to other financial issues if you don’t have the funds to cover other essential bills.
You Could Face Issues With Disputing Mistakes
If you notice a mistake with your bill, you could have difficulty disputing the charges, since the money already came out of your account. It can be much easier to dispute billing mistakes when you haven’t already paid.
Autopay Could Lead to Expensive Renewals
Depending on how you set up your payment structure, autopay could lead to an expensive auto-renewal for which you don’t have the money. For example, some service providers will charge you for an annual subscription instead of a monthly bill, so you could get hit with an unexpected $200 bill for a service that you haven’t used in months, because you forgot about autopay.
Depending on the timing of your renewal, you could get behind on bills because of a poorly timed autopay.
Closing Thoughts
Even though using autopay can simplify your life in many ways, it’s still important to consider its downsides. You may want to consider tracking all of your expenses and monitoring them to ensure you have the funds ready when the charge comes out of your account.
More From GOBankingRates
