Autopaying Bills: Should You Use Credit or Debit?

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Autopay is a way of setting up your bills to be paid automatically on the same day every month. Many companies allow customers to either connect directly to a bank account for payment, or use a credit or debit card to pay their monthly bill in this way.

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When it comes to using a card for autopay, there are pros and cons of each. Let’s review them so you can decide which is best for you.

Benefits of Paying With Credit


The main reason many people pay their bills with a credit card is its convenience, according to The Balance. Many companies allow auto-payments with credit cards. They’re easy to set up on autopay systems, and you don’t have to worry about the money coming out of your checking account.

Improves your credit score

If you’re responsible about paying off the credit card you use for autopay each month, or only carry a low balance, this benefits your credit score. This enables you to get better rates on things like loans, mortgages and car purchases.

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Don’t have to come up with the money immediately

If you’re living paycheck to paycheck, or your bills are due before your paycheck comes in, credit allows you the convenience of being able to pay your bills automatically without having to worry immediately about when you get paid. Of course, you want to be sure you can pay off your bill down the road.

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Earn rewards

Credit card companies don’t care what you’re using your card for. So, you can rack up rewards no matter what you’re paying for, which brings benefits far beyond just paying bills, such as earning points that can be redeemed for goods, services and travel, among other things.

Downsides of Paying With Credit

Potential interest charges

It’s tempting to pay with credit, because you don’t have to take any money out of your checking, which can make you feel temporarily flush with cash. However, paying your bills automatically by credit card can get expensive if you don’t pay off your full bill every month. You will then be racking up interest on bills that you really don’t need to accrue.

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Late fees are a problem

Additionally, if you’re late on your credit card payments, then you could end up paying extra fees on top of interest on top of what you owed for your bills, which is not a great way to get ahead financially.

It can negatively affect your credit score

And, if these worst case scenarios continue to play out, late payments and carrying a high debt can negatively impact your credit score, which can lead to trouble getting good rates on things such as a car, a home, or any other kind of loan you might need to take out.

Benefits of Paying with Debit

Not all bills accept credit cards

Not all companies and organizations allow for autopay by credit card. In this case, you’ll be mighty glad for your debit card, which enables you to pay your bills easily and on time.

You have a more real-time picture of your money

One of the best benefits of autopaying your bills with your debit card is that you have a more accurate, real-time picture of your financial standing. With credit, you can always tell yourself you have more money than you actually do — but that money comes due, with interest. If you pay with debit, you know exactly how much you have left after bills.

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No fees or debt

Additionally, when you pay with debit you never run the risk of racking up debt, because your bill is paid in full. You also won’t earn any credit card late fees (though some companies can still charge you late fees for not paying your bills on time).

Some companies incentivize paying with a checking account

According to Experian, some companies even incentivize customers paying their bills with a checking account instead of a credit card, since credit card companies charge a per-transaction fee to the company.

Downsides To Paying With Debit

The only major downside to using a debit card is if you don’t have enough money in your account at the time of autopay processing, you can be charged non-sufficient funds fees by your bank, as well as fees from the bill company. Further, you may also miss out on some credit card rewards, though debit cards offer rewards and cash back too.

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About the Author

Jordan Rosenfeld is a freelance writer and author of nine books. She holds a B.A. from Sonoma State University and an MFA from Bennington College. Her articles and essays about finances and other topics has appeared in a wide range of publications and clients, including The Atlantic, The Billfold, Good Magazine, GoBanking Rates, Daily Worth, Quartz, Medical Economics, The New York Times, Ozy, Paypal, The Washington Post and for numerous business clients. As someone who had to learn many of her lessons about money the hard way, she enjoys writing about personal finance to empower and educate people on how to make the most of what they have and live a better quality of life.

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