Autopay is an incredibly convenient and hassle-free method that ensures timely payment of bills every month, eliminating the need to worry about late fees. By setting up autopay for essential expenses like mortgage or rent, individuals can have peace of mind.
However, it is important to note that not all bills are equally suitable for autopay. When striving to improve one’s financial situation and be more proactive, it is wise to exercise extra caution and refrain from using autopay for certain specific types of bills.
Here are 7 bills you should never put on autopay.
1. Credit card
Credit card expenses are subject to fluctuations on a monthly basis, influenced by factors such as significant one-time purchases or increased shopping activity compared to regular spending patterns.
When opting for autopay, where funds are automatically deducted from your checking account to settle the credit card bill, there is a possibility of encountering a substantial withdrawal after a month when you indulged in excessive credit card usage. This heightened withdrawal amount can potentially lead to an overdraft fee being charged by your bank.
To avoid such unfavorable circumstances, it is advisable to handle credit card payments manually. By personally managing these bills, you can maintain better control over your finances and ensure that you never exceed your predetermined budget.
2. Utilities
Utility expenses have the tendency to vary on a monthly basis, influenced by a range of factors. For instance, during the summer season, your electric bill might experience a noticeable increase due to the prolonged use of air conditioning to combat the rising temperatures.
Similarly, when you rely on sprinklers to maintain your garden or lawn during the summer, it is expected that your water bill will reflect an upward trend.
Conversely, there are instances where utility bills exhibit contrasting patterns. During the summer months, your gas bill may notably decrease since there is typically no need for heating.
However, as the winter season arrives, the increased usage of your furnace or central heating system can lead to a considerable surge in your gas bill.
By actively monitoring your utility bills, you gain valuable insights into your energy and water consumption patterns. This awareness allows you to better understand the impact of various factors on your bills and serves as a motivating factor to potentially reduce consumption and cut back on unnecessary expenses.
3. Gym membership
Perhaps you had sincere intentions and a burst of motivation when you initially signed up for that gym membership, envisioning a healthier and more active lifestyle. However, it is worth reflecting on the current state of your membership usage.
If you pause and consider the frequency of your visits to the gym, it may dawn on you that it has been quite some time since you last stepped foot inside the gym.
Despite your waning interest or changing circumstances, the autopay feature associated with your gym membership makes it effortless for payments to continue seamlessly, long after you have discontinued utilizing the membership.
The convenience of autopay can unintentionally allow payments to persist even when the underlying service no longer holds value or relevance to your life. This can lead to financial wastage and the accumulation of unnecessary expenses over time.
4. Cable TV
When you choose to put your cable bill on autopay, it becomes a matter of “out of sight, out of mind.” This means that even if you don’t find yourself watching much television, you tend to overlook the amount you’re paying each month for the cable service.
By setting up autopay, the payment process becomes automated, and the bill payment becomes a routine that requires little attention or active consideration. Consequently, you may not fully realize the financial impact of the cable subscription, potentially leading to a sense of detachment from the actual cost.
However, by consciously making an effort to manually pay the cable bill, you foster a heightened awareness of your expenditure. This deliberate action prompts you to pause and reflect on the value you are receiving in return for the money you are spending.
You begin to question if the cable subscription is genuinely worth the recurring expense.
5. Streaming services
Similar to cable TV, having unwatched streaming services on autopay can potentially have a detrimental effect on your budget. It is important to recognize that these subscription bills, if left on autopay without regular evaluation, can accumulate and drain your financial resources.
Rather than passively allowing these streaming service bills to be automatically deducted each month, it is beneficial to adopt a proactive approach.
Consider re-evaluating your streaming subscriptions on a monthly basis to determine which ones you actively use and enjoy, and which ones have become neglected or redundant. Taking the time to assess your streaming habits allows you to make informed decisions about which services are truly worth the cost.
One advantage of many streaming services is that they typically do not require an annual contract, offering flexibility and freedom to cancel or modify subscriptions as desired. This allows you to adjust your streaming services based on your current viewing preferences, interests, and financial situation.
6. Cell phone
Opting to switch from an unlimited cell phone plan to a pay-as-you-go option, where you pay for only what you use each month, can be a wise decision. However, it is important to be mindful of the potential pitfalls that may arise when utilizing autopay for a cell phone bill that fluctuates on a monthly basis.
Similar to the concern with a credit card bill, relying on autopay for a cell phone bill that varies in cost can lead to unforeseen issues. For instance, you may not be fully aware when you exceed your allocated data or text message limits, resulting in additional charges that go unnoticed.
When your cell phone bill is automatically deducted through autopay, it can create a sense of detachment from the actual usage and charges. This lack of awareness may prevent you from closely monitoring your data and text message consumption, leading to potential overages and subsequent charges.
7. Bills you don’t pay in full
An effective approach to managing bills with fluctuating amounts is to utilize autopay and set a maximum limit for the bill to be covered each month. This method can help smooth out the variations in your expenses and provide a level of predictability.
However, it is crucial to be cautious when relying on autopay with a capped limit. If you happen to exceed that predetermined amount, the remaining balance of the bill could carry over to the following month, potentially incurring additional interest charges.
The concern arises when this rollover goes unnoticed, as you may not be aware that the balance is accumulating interest over time.
To mitigate this risk, it is advisable to ensure that any bills you choose to put on autopay are set to pay in full. By opting for full payment, you eliminate the possibility of carrying forward any balance and prevent the accumulation of interest charges.
This proactive approach ensures that you remain fully aware of the actual amount being paid and prevents any surprises or financial implications down the line.
