Pros and Cons of Automatic Bill Payment
By: Staff

In today’s increasingly electronic society, consumers have many options for paying bills including setting up automatic payments. These payments can come from bank accounts, debit cards or credit cards. Automatic bill payment offers a lot in terms of convenience, but there are some pitfalls you need to be aware of beforehand. Here are some of the pros and cons:

1. Assurance that bills will be paid on time. When you set up automatic bill pay, you don’t have to worry about forgetting a due date on a bill. That means you won’t have to deal with late fees, disruptions in service or hits on your credit report because you inadvertently overlooked a bill.

2. Save time, money and trees. Not having to sort through paper bills and write checks each month saves you time. Additionally, you save money on having checks printed and buying postage. With automated bill pay you can switch your accounts to “paperless,” which both lessens your impact on the environment and minimizes clutter.

3. Get more rewards from credit cards. If you pay bills automatically with a rewards credit card, you can earn more rewards points. If you pay off that credit card each month (within the grace period), you don’t have to worry about finance charges.


It’s easy to lose track of your payments. The convenience of paying bills automatically can make you lazy when it comes to tracking your finances. Setting up a bunch of automatic payments may cause you to spend more than you realize. Since you do not physically pay the bill, it may not register with you in the same way it would if you were writing a check. It’s important to note automatic payments in your budget just as you would any other expenses. When using a credit card, make sure to check it each month to verify that the charges are correct.

Mistakes can be made. Though it’s not common, it is possible that an electronic error can cause a mistake with your bill payment. It’s important to make sure that payments are actually made so that you don’t have to deal with the consequences of a late payment or other potential problems.

Bank accounts can be easily overdrawn. If you are using a checking account for an automatic bill payment, you have to always have enough money in that account to cover the automatic draws or you’ll end up paying overdraft fees.  That means keeping close tabs on your account and knowing when to expect automatic payments to be withdrawn to prevent an overdraft.  It’s better to use a credit card with an automatic payment than a checking account or debit card. With a credit card you know the funds will be there (if you’re not over your limit), and it’s easier to challenge a mistaken bill that’s charged to a credit card than get money taken from your account returned.

If you decide to go with automatic payments, setting them up is easy to do. If you want to use a credit card or debit card, make the arrangements on the payee side. If you want use your checking account, you can make the arrangements through your online bill pay center.

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