Everyone might benefit from a more straightforward method of budgeting and money management. By setting up autopay for your payments, you may reduce your chance of missing a due date and incurring late penalties, as well as damage to your credit score.
Although automated payments can streamline your personal finances and save you time, they aren’t always the best option.
According to Carter Seuthe, CEO of Credit Summit, “automatic bill pay is a convenience that can save many people’s lives.” “If you can trust that the money is in your account, you may set it and forget it. But for a variety of reasons, convenience may also be a disadvantage.
Even for those who can afford it, if something is automatically invoiced for something you no longer use, you might not notice. Alternately, if your income varies, you could not consistently have the funds to pay it, which would overdraw your account and result in further penalties on top of the already existing negative balance.
Read also: Social Security Recipients Receive Direct Payments of up to $4,555 within Five Days
Proceed with Caution
For payments that are the same each month, like your mortgage and automobile payments, autopay is great. It is simpler to prepare a budget and arrange for automatic drafts when you are aware of what to expect from these expenses. With variable monthly costs, this isn’t the case.
If you have an unlimited mobile plan and your bill never changes, setting up autopay might help you manage your payments more quickly. It is also possible to automatically set up payments for non-unlimited mobile plans.
The issue is that, depending on your data consumption, the amount you owe might vary from month to month. And the additional money deducted from your bank account might result in an overdraft and bank fines if you neglect to examine your telephone bill in months when you owe more than normal.