5 Bills Millennials Have on Autopay, That They Shouldn’t
Written by
Angela Mae
Edited by
Zuri Anderson
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Autopay comes in handy when you’ve got fixed, recurring bills that you don’t want to risk forgetting about every month. With it, you don’t have to worry so much about missed payments, late fees or damaged credit. It’s very much a “set it and forget it” solution in a busy world.
For 41% of millennials, autopay is the way to go, according to an MX study. But just because certain bills can be paid automatically doesn’t mean they should be.
Here are five bills millennials tend to have on autopay that they shouldn’t — and why.
Subscription Services
Millennials are no stranger to subscription services. According to PYMNTS, roughly 80% of millennials have at least one monthly membership to places like Amazon Prime or Walmart+. Nearly 40% have dual memberships.
And that’s only accounting for online shopping subscriptions. Online video streaming, music, fitness and gaming services are also popular amongst this generation.
But while it’s easy to sign up for autopay, doing so can lead to spending more than you think. Those monthly payments of $10 or $20 add up when you have multiple subscriptions. When your payments are automatic, you might not even realize how much you’re spending.
For example, Deloitte found that the average millennial had five paid video streaming services — like Netflix — and paid an average of $69 a month last year. That’s an $8 monthly increase from 2023. It’s also $828 a year.
‘Free Trial’ Bills
Commonly found with those monthly subscription services are free trial periods, usually lasting a week to a month. To sign up, you just need a working credit or debit card and you’re good to go.
But once the trial period ends, payment kicks in. With your card already on file, the once free service suddenly costs money. If you forget to cancel before the trial ends, that’s an extra drain on your bank account — or charge to your credit card.
Avoid putting services that come with an initial free trial period on autopay. Or if you do set it up that way initially, be sure to go back and switch to manual so you don’t get charged for something you don’t want.
Credit Cards
Autopay can make sure you never fall behind on credit card payments. One study by the National Bureau of Economic Research even found that signing up for autopay more than doubles the amount of credit card users who make their monthly minimum payments on time.
But with convenience comes a few issues. The average consumer spends $181 a month on their credit cards, as per Experian. Rising balances, however, mean higher minimum payments. For millennials who don’t have the available funds in their account, this leads to overdraft fees, nonsufficient funds fees and potentially other financial or credit issues.
Millennial or not, unless you can guarantee keeping up with your monthly credit card payments, it’s better to pay them manually. This can also help you catch any errors or fraudulent charges that occur.
Utilities (Electricity Bill)
The average electricity bill is $140 a month. However, prices fluctuate wildly based on where you live, how much energy your household uses and the season.
For bills that fluctuate from month to month, it may be better to stick to manual payments. If you’re worried about missing a due date, set a reminder in your phone or check your email for upcoming deadlines.
Medical Bills
Medical bills need to be paid, but only if they’re accurate. The Commonwealth Fund found that 45% of insured adults received a medical bill that was either in error or wholly unexpected.
Medical bill errors can cost you hundreds or thousands of dollars — unless you catch them in time. That’s why manually paying these bills is key. It can minimize the risk of being charged for something your insurance should have covered, or a service you never even received.
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