How Setting Up Automatic Payments Saves You Money
By: Jean Chatzky | Jan. 3, 2024
Simple tips for setting up automatic payments
According to a recent survey, 30 percent of American adults say that they don’t pay all their bills on time. With late payment fees of $25 and up and interest rates soaring, that can get very expensive very quickly. Enter autopay and bill pay. Both tools allow you to set up automatic payments for your recurring monthly bills. This can save you big money – but you also need to understand the details to make these systems do their best for you.
Autopay vs. Bill Pay
- Autopay allows you to set up autopayment for recurring bills by having a charge placed on a credit card or automatically debited from your checking or savings account.
- Bill Pay. Your credit union or bank provides bill pay and allows you to make payments through an online portal – via your computer, tablet, or phone. You can set up automatic recurring payments there as well.
Get started with Industrial Federal Credit Union's auto and bill pay here.
How to Get Started
Fixed Payments. Start with bills that are for the same amount every month – rent or mortgage, subscription services, cable or internet. These make for easy budgeting since you know the exact amount that will come out of your account every month.
Variable Payments. Next, look at bills with payment amounts that vary from month to month, like credit cards, and utilities. Variable payments are more difficult since you have to be sure you have enough in your account to cover the set payment. For this reason, many people only opt for the minimum payments on credit cards. Be careful, this can result in additional interest charges and remaining in debt longer than necessary. It’s better to have the full payment deducted, which means you’ll have to keep a closer eye on your spending.
Set Up Your Transfers. For billers that offer autopay, work through their portal or app to set it up. For those that don’t, like some landlords, establish autopayments through your credit union’s or bank’s portal.
Don’t Just Set It and Forget It. Auto and bill pay lessen the chance that you forget to pay a bill, but resist the urge to put it completely out of your mind. Make sure you sign into your accounts regularly to double-check your charges, and the flows of funds and verify that things are running smoothly.