Hazards of Automatic Bill Pay

Photo by SeraphimC.

Society is moving toward going green, so doing your part is becoming more important than ever. People now have more ways than ever to help the environment, such as paying bills online to save paper. Many banks have given their customers the option of using prearranged automatic payments from bank accounts, debit cards and credit cards to handle anything from a car payment to Netflix subscriptions. Automatic bill pay takes the thought out of paying bills altogether, but it can also become a problem if you don’t keep careful tabs on your expenses.

Be smart about automatic payments. It’s smarter to use a credit card rather than debt or a bank account since you will be able to notice mistakes in your monthly statements and fix them before any money is taken from your account. Also, if you have a habit of keeping a low balance, overdraft fees will add up if you forget to keep track of your balance.

The MSN Money article, Perils of Automatic Bill Pay, says:

The best candidates for automatic-payment arrangements are those bills that are the same amount every month. They’re not as likely to be the source of contention or error.

But there can still be errors. Watch out for charging the wrong amount and double billing, the two most common errors. Skip auto pay for bills that change from month to month, like phone and utility bills. Read more…