View Full Version : Canceling Auto Payments
I have a long commute home so I think about stuff to keep me awake. Today's topic was whether or not canceling auto payments would save money. I have several bills on auto pay through my credit card. Normally I pay my credit card bill off each month. But we recently redid several rooms in our house, Christmas, and oldest son's birthday coming up, I have a balance that will take some time to pay off. Any amount I can take off my bill each month sounds like a good thing.
Do you think there are any benefits to canceling auto payments in the long run???
Teacher Terry
1-9-20, 7:08pm
I use auto pay through my bank account. That might work better.
I auto-pay some bills; not others. There are some (like the gas/electric bill and the VISA/MC bills) that I want to see every month before they gets out of hand or so I can pull payments from multiple streams (savings, rental-house account, etc.). Other bills (Hulu, some charitable donations, etc.) are on auto-pilot and I'll catch any errors (none yet) when I review our bank statement monthly.
One benefit I see to cancelling auto payments is in not having your CC or bank information on various vendor Web sites for some hacker to glom onto or for some fwit employee to have their laptop with such information get stolen. To that end, I've started moving those kinds of payments either to my credit union or to PayPal. It does present a somewhat larger target to have so many payment eggs in one basket, but I think my CU and PayPal have a vested interest in making that data more secure than Bill & Ted's Most Excellent Western Emporium.
One disadvantage to cancelling auto payments is that one then needs to put the payment on the calendar each time it has to be paid. Payments can be missed inadvertantly.
Teacher Terry
1-9-20, 8:53pm
Like Steve I don’t give my bank information to others. I set up autopay through my bank account because one month I forgot to pay a couple of bills.
Do you think there are any benefits to canceling auto payments in the long run???
How long are you talking about and what is the interest cost? It's a lot of hassle to change it changing back in a few months could prove an issue? Only you can decide if this is the best decision for you.
How long are you talking about and what is the interest cost? It's a lot of hassle to change it changing back in a few months could prove an issue? Only you can decide if this is the best decision for you.
It will take about 3 months to pay off the credit card. We have no other debt as our house was paid off several years ago. We redid the kitchen, bathrooms, and living room with all new paint and furniture so had to use the credit card for everything. Have been paying $1000 per month to get it down as quick as possible.
I was thinking more along the lines of stopping auto pay and just writing a check each month for the bills. I normally write the due date on the envelope to remind me when it needs to be paid so that won't be an issue
I go back and forth with auto-pay but have decided to keep close watch on the bills which are mostly paperless. I have a monthly sheet that I record all my payments made through the bank online. The only challenge is that they all used to come towards the end of the month but now are scattered throughout the month. This does ensure that I keep a close eye on my banking and transactions posted to my one CC.
Occasional bills are paid using Paypal.
So far I have not found any great advantage to either auto-pay or not so no help to answer your question.
So far I have not found any great advantage to either auto-pay or not so no help to answer your question.
If you've been paying interest for several months and are now just considering stopping, is it really worth stopping now? It could take 2 cycles to get it done.
I really do find advantage. I negotiated with everyone what day the auto-pay would happen way back when this became an option thus spreading payments across 4 paychecks. I have everything possible on a level-pay plan so I knew exactly how much. I do not have to think about paying bills at all. No worry when we're traveling or at the cabin for extended time. It is paperless because all of these are also on e-statement, which I love and no stamp $ -these add up over time.
I can't find a disadvantage. This however, has no bearing on Klunik's decision matrix.
Teacher Terry
1-9-20, 10:20pm
I wouldn’t want to pay interest on bills. You can set it up through your bank and then you won’t need to think about it.
switching autopay that's through a credit card is typically fast and easy. What about using a different credit card for the autopay of ongoing bills, making sure to pay that one off every month? = no interest accrued on bills, and if you find a good rebate card, money back for running the bills through a cc.
If you've been paying interest for several months and are now just considering stopping, is it really worth stopping now? It could take 2 cycles to get it done.
I really do find advantage. I negotiated with everyone what day the auto-pay would happen way back when this became an option thus spreading payments across 4 paychecks. I have everything possible on a level-pay plan so I knew exactly how much. I do not have to think about paying bills at all. No worry when we're traveling or at the cabin for extended time. It is paperless because all of these are also on e-statement, which I love and no stamp $ -these add up over time.
I can't find a disadvantage. This however, has no bearing on Klunik's decision matrix.
I was thinking along the lines of that if I didn't have these Bill's connected to my credit card, my balance each month would be close to nothing once I got it paid off. I rarely use it. I only have one credit card so can't transfer the balance.
Once you go through a cc cycle with a $0 balance, you don't pay any interest at all on your current month's purchases / bills as long as you pay the statement balance in full by the due date. In that case, it's simply a convenience to have your bills go to one place, and with the right card you can even get a bit of a rebate from the cc company.
You are right, though, in thinking that as long as you're carrying an unpaid balance on the card from month to month, you're paying unnecessary interest on those bills.
Ugh! Make that four months to get out of debt. Just got my bill yesterday and forgot I paid for AHL hockey tickets and hotel room when we go to PA in April.
I do many auto-payments, for smaller type bills.
But because I'm an independent contractor with variable income, I prefer NOT to put bills larger than around $200 on Autopay because if I have to tweak the payment date by a few days I can more easily do it by manual pay.
However, Autopay definitely helps keep my mental slate clean and gives me peace of mind that I won't get slapped with a late fee if I forget a payment due date by only one day.
Ugh! Make that four months to get out of debt. Just got my bill yesterday and forgot I paid for AHL hockey tickets and hotel room when we go to PA in April.
Thought: sometimes when I don't want a bigger than necessary debit from my account, I will make a payment right before auto-pay is set to come out. So although you're carrying a balance, your interest will not be horrid for it.
If I had savings to pay off the balance, I would do it now even from my emergency fund. I would then have my CC to fund an emergency.
It's a matter of convenience and preference. I have no interest in giving up auto-pay. It's really a matter of how you want to be paying bills in 5 months.
Thought: sometimes when I don't want a bigger than necessary debit from my account, I will make a payment right before auto-pay is set to come out. So although you're carrying a balance, your interest will not be horrid for it.
If I had savings to pay off the balance, I would do it now even from my emergency fund. I would then have my CC to fund an emergency.
It's a matter of convenience and preference. I have no interest in giving up auto-pay. It's really a matter of how you want to be paying bills in 5 months.
Husband and I each only have one credit card and we only use it for emergencies or large online purchases. My bill is only high because we literally redid almost every room in our house with flooring, paint, and furniture. We didn't buy cheap stuff because we wanted longevity out of everything we bought. Normally, my balance is maybe $200-$300 a month between auto pay stuff and random purchases.
ToomuchStuff
1-11-20, 5:06pm
I am old school. I prefer not to use the card for the things that the credit card company, keeps sending me offers to use it for (gas, grocery, restaurants), as it builds into their database about me. (where the things I do use it for, includes a lot of work stuff, which skews those)
I don't do electronic banking or link things electronically to my account. (helped with enough computer illiterate people, that have done stupid things, I realize no matter how I try to keep up, there is always someone WAY ahead of me) Also know of some problems people have had when they canceled autopay.
I do have one cc and one dc. Because I only have one cc, I know what my limit is, and haven't had it raised in years (last time they asked for information to raise it, I declined, saying that is enough). You have a limit, which might be a big factor for you, in this decision, especially if your getting ready to use it for travel (cars, plane tickets, etc). I am close enough to "pay stations" or my internet provider, that I can just go pay it, if I am going to be close on mailing it. (last time I ran out of checks)
Best thing is just make a list of your pro's and cons, and use it for your basis.
Decided to switch autopay from the credit card to our checking account. That way, I can keep the ease of auto pay and get rid of having a monthly balance on my card once it is paid off.
Teacher Terry
1-17-20, 1:56pm
K, that’s what I do.
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