The Pros and Cons of Autopayment

There are five ways to make a payment to a creditor: by phone, by mail, in person, online or automatically. When automatic payment is set up, debtors can simply forget about it. All you have to think about is providing sufficient funds on your account.


  1.  What Is Autopayment

An automatic payment is an arrangement which allows the creditor to periodically withdraw money from an account to pay a bill. It is normally used for regular monthly payments such as a utility bill. But it can both save and cost you money.


2.  Pros and Cons of Autopay


Autopayment is good because it keeps you on time with your rent, Centerpoint Energy utility bill, internet and insurance payments. There are plenty of good reasons to take advantage of autopay.


Avoid late payments

The only way to be late with your payments is if you don’t have enough funds on your bank account. Keep in mind that one late payment can be all it takes to drop your credit score.


Avoid penalty fees for late payments

A single day of being late for a payment comes with a fee. Why waste money when you can entirely avoid this scenario with autopay?


Avoid postage expense and checks altogether

No need to go to the post office, buy a stamp and send an envelope with your check. Money and time saved.


Saves time

This is perhaps the biggest advantage of automatic payments. Time is even more than money. Every minute of your life is too precious to waste it on transferring funds, writing checks or waiting in queues to pay your bills. Your bills will get paid with zero time and effort wasted.


However, because it is automated you are less likely to look at what you are paying for, increasing the odds of overpaying for services and making it harder to identify savings areas. It also comes with downsides.


Lose track of what you owe and what you are paying

If you have student loans or are paying off debt, things get harder to track. By forgetting about your bills, you can easily forget what you’re in for. The missed cost savings from not following your balances closely can be significant so you want to make sure that you check your statements regularly. Just like in life, you need to participate in the process even though automation provides us with a lot of benefits, we should not give it all the power.


Hidden fees and changes may go unnoticed

With automatic payments, you can easily get overcharged. There could be a hidden fee, an increased interest rate or simply a mistake that can go unnoticed. But you can also circumvent this issue by simply regularly checking your bank statement to identify any changes.


It can cost you more

These days, it’s easier than ever to subscribe for magazines, packages, memberships or any subscription services. What starts as a free trial switches to a paid subscription and you completely forgot about having to cancel that trial. These can add up to a significant figure and it is a money loss you can easily avoid.


It makes it easier to forget about non-automatic bills

By losing the habit to pay for your bills, you can easily forget to pay a manual bill. Make sure you add a reminder for those.



No one can argue that autopay is convenient, but it does not come without risks. Over-relying on automation can be dangerous and not only for your finances. In order to enjoy the phenomenal benefits of autopayments, make sure you review your statements regularly to ensure you won’t miss any important details or potentially overpay for something. Let automation save you time but make sure you stay on top of things for it to truly work for you.

Autopayment has its pros and cons. It protects your credit score by ensuring your bills are paid on time but it can result in overpaying for services and just losing touch with your bills.
All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.