You can’t always just go out and get whatever you want or need. You can pay in installments, which may or may not require a down payment, if the price is large. With significant purchases like homes and cars, this payment schedule is customary.
You can choose to choose the buy now, pay later option for more insignificant purchases. This often entails dividing the cost of a product into equal portions and making scheduled payments.
Although it appears straightforward, there are risks, such as unforeseen costs.
Check out our report on BNPL programs by tapping or clicking here.
On some things (mainly constant monthly payments), autopay is a terrific technique to avoid late penalties and interest. However, it is not a good idea for every recurring charge. We put prepared a list of bills you should not put on autopay.
How does Autopay work?
With autopay, you provide the business with your routing number and account number so they can charge your account automatically each month for your bill.
In order for automatic debit payments to post by the due date, processing often begins two days in advance.
Mobile phone bill
When your bill never changes and you have an unlimited cellular plan, using Autopay to manage your payments will save you time. Automatic payments can also be set up for an unlimited cellular plan.
The issue is that depending on how much data you use, your monthly payment may alter. Additionally, if you don’t remember to check your telephone information in months when you owe more than normal, the excess money deducted from your bank account may result in overdraft fees and other fees from the bank.
Additionally, the billing date for some cellular plans varies from month to month. Others have a monthly cycle that changes depending on the amount of days in the month, while you may have a specific date, like the 15th.
It does not ensure a regular payment date each month, and if a payment arrives when you least expect it, you risk being caught off guard and short on cash.
Once you’ve set up Automatic Pay, there’s also less of a possibility that your telephone bill will go unpaid because it’s a hands-off method of paying bills. This implies that you can miss billing mistakes and end up paying more than necessary.
Utility bill
Your water, gas, and electricity bills will also vary each month unless you’re enrolled in a budget plan through your utility provider, which allows you to pay a certain amount each month. Therefore, it is often safer to avoid automating utility bill payments.
Signing into your accounts is necessary to start a one-time payment each month. You are more likely to study your statements in this situation before making a payment. And it gets simpler to spot odd pricing increases when you constantly analyze your statements.
An indication of a water leak in your home, for instance, can be a high water bill. The leak may go undetected for months and seriously harm both your house and your finances if you set up an auto-draft for this bill and never check your statements.
Satellite and Cable services
If you view a lot of movies on demand, your cable and satellite fees may fluctuate. You can never keep track of how much you spend on supplemental services when your cable payment is automatically deducted from your bank account.
Every year, prices for new services from cable and satellite providers, such as regional sports networks you don’t get, are also raised. You have the opportunity to analyze your statement for price hikes and all the choices you aren’t using when you pay your bill the usual way, by check or by making a one-time payment online.
You may determine when the promotional deals you signed up for have expired by checking your cable or satellite bill. It might also motivate you to phone the business and request a new agreement for its services.
Streaming music
You may listen to virtually any song by any artist on streaming music services like Spotify and Apple Music. The drawback is that before you can access the tracks, you’ll need to give a credit card or bank account number. Your account will be automatically charged each month by the music service.
It’s a pleasant luxury to listen to music online, but only if you’re getting your money’s worth. The business will continue to draft your account even if your use declines and you stream less music or no music at all until you cancel your membership.
You will be paying for a service you no longer use if you forget to cancel.
Stream videos
The convenience of being able to watch whatever you want, whenever you want, makes streaming services like Netflix and Hulu attractive. But before registering for these services, consider twice. Some of the TV series and movies that streaming providers offer are also accessible on demand through your cable provider if you have cable.
If you make it a habit to charge your bank account or credit card each month, you won’t have to worry about paying the fees if you don’t use the services. You are practically throwing money down the drain when you subscribe to streaming but don’t fully utilize the service.
Subscription to a newsletter
If you’d rather read the news than watch it, you can always have the most recent headlines at your fingertips by subscribing to a newspaper’s print or digital version.
Customers have the option of automatic payments with some newspapers. But of course, life can suddenly get busy. Additionally, you’ll be spending money on a membership you don’t use if you become distracted and pile the newspapers in the corner without even opening them.
On the other hand, if you plan a one-time payment each month and the service isn’t useful to you, your likelihood of canceling the subscription rises.
Beauty boxes
Many cosmetics companies advertise monthly subscriptions for Beauty Boxes, which send customers a box of goods to try out at home. It’s a clever marketing move on the part of the cosmetic industry, and it makes it simple for you to try out several cosmetics products without having to shell out the full retail price.
These memberships can appear to be a small monthly expense because they are typically rather affordable, starting at about ₱500 per month. However, the cost of the Beauty Box subscription is going up every year. If you set up automatic payment for this membership, you can overlook to split the cost and compute its worth.
Even though you spend more than ₱2500 a year on your boxes, you may only use some of the contents.
Gym subscriptions
People are motivated to lose weight as the new year approaches. A gym membership can provide all you need since not everyone can afford home equipment. However, beware of greedy management who will stop at nothing to convince you to join up for a recurring monthly or even annual membership.
No matter how carefully you prepare, joining a gym is difficult. You might travel more in one month than the next because life happens.
Conclusion
By enabling businesses to automatically deduct your monthly payment from your checking, savings, money market, or credit card account, automatic debit payments make it simple to pay bills.
For recurring payments that remain the same each month, use autopay, and always exercise caution before giving over information about your bank account to any business.
