Home > Credit Cards > The Dos & Don’ts of Auto-Paying Your Bills

Comments 0 Comments

Missing payments on a loan, credit card or utility bill can do big damage to your credit score. Fortunately, many companies now let customers set up automatic bill payments tied to a card, checking account or third-party service. But there are some things to know before taking advantage. For starters, “you must not use the auto-pay as an excuse not to still check your detailed monthly statement carefully,” Thomas Nitzsche, media relations manager for ClearPoint Credit Counseling Solutions, said over email. You’ll still need to monitor credit card statements, and you’ll want to check bills to make sure that you’re being charged fairly.

Here are some other tips for auto-paying your bills.

1. Consider Your Plan

Some service providers charge a fee to pay with credit. And if you link your payments to a checking account, you’ll need to make sure you have enough money when the bill is set to debit so you don’t incur overdraft or late payment fees. Those on a tight budget “may need the flexibility of making the payment when you know the money is in the account, taking into account the billers’ grace period,” Nitzche says.

2. Don’t Set Every Bill

Any bill left unpaid long enough could wind up in collections and then hurt your credit. But not everyone should be debited automatically. “One item you may not want to put on auto billing is any subscription-type charge, which will auto-renew,” Nitzche warns. “The renewal notifications can easily slip past you and in some cases, they cannot be refunded once billed.”

3. Know Your Cards

If a card tied to auto-pay expires, a payment after the fact may get rejected—and yes, this could hurt your credit. To avoid this, “keep track of which bills are billing to which cards, and be sure to make updates if the card number or expiration date is renewed,” Nitzche says.

4. Beware Phishing Scams

Setting up auto-pay means turning over sensitive payment information to another third-party, which leaves you open to fraud. It’s a good idea to be vigilant should you learn any company you gave this data to is compromised. “Any emails, text or calls from the biller should be verified to ensure it is not fraud,” Nitzche says, noting phishing scams.

If you have reason to believe that your personal information has been compromised, keep an eye on your credit report. You can pull your free annual credit reports at AnnualCreditReport.com and check your credit scores for free every month on Credit.com. A sudden drop in your score, mysterious addresses and new credit lines that you didn’t open could be signs your identity has been stolen.

More Money-Saving Reads:

Image: DigitalVision

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team