Autopay might seem like a convenient way to handle bills, but experts warn that it’s not always the safest option. While automated payments save time and prevent missed deadlines, certain types of bills could lead to costly mistakes if left unchecked. Here are 10 bills you should avoid putting on autopay and the reasons why it’s risky.
1. Utilities
Utility bills often vary month to month. Autopay could result in unexpected overdrafts if a bill spikes unexpectedly due to seasonal changes or errors in billing.
2. Credit Cards
Setting autopay to cover only the minimum balance can leave you drowning in interest charges. Paying in full manually ensures you’re not accruing unnecessary debt.
3. Subscriptions
Streaming services and subscription boxes are notorious for small, recurring charges that add up. Autopay could lead to paying for services you no longer use.
4. Gym Memberships
Many gym memberships have complex cancellation policies. Keeping these on autopay might mean continuing to pay long after you’ve stopped going.
5. Medical Bills
Medical costs can be unpredictable, and insurance adjustments often occur post-billing. Autopay might cause you to pay an amount that should’ve been covered by insurance.
6. Insurance Premiums
While convenient, autopay for insurance can make you overlook policy changes, premium increases, or even accidental double-billing.
7. Loans with Variable Rates
Loans with fluctuating interest rates can cause payments to rise without warning. Monitoring these bills manually ensures you’re aware of any changes.
8. Cell Phone Bills
Autopay doesn’t account for overage charges or roaming fees. A surprise extra charge could slip by unnoticed.
9. Cable and Internet
Promotional rates often expire, leading to unexpected price hikes. Without regular review, you might be paying more than necessary.
10. One-Time or Irregular Bills
Bills like annual property taxes or irregular invoices shouldn’t be automated. Handling these manually ensures you’re paying the correct amount at the right time.
Why It’s Risky
The primary issue with autopay is the loss of visibility. You might overlook billing errors, rate changes, or unnecessary services. Additionally, autopay can make it easier to fall victim to overdraft fees if you’re not regularly monitoring your account balance.
What to Do Instead
To stay in control of your finances, review each bill before paying. Set reminders or use budgeting tools to ensure payments are made on time without relying on autopay. For bills that must be automated, keep an eye on your bank account and review statements regularly.
Final Thoughts
Autopay can be a lifesaver for fixed, predictable expenses, but for variable or sensitive bills, it’s best to stay hands-on. Being proactive with your payments can save you from financial headaches down the line.
Stay informed and protect your wallet by choosing your autopay options wisely.
