It’s not always possible to buy something you need (or want) outright. If the price is high, you can pay in installments, which may or may not involve a down payment. This payment plan is typical with large purchases like houses and cars.
For more minor things, you can choose to go the buy now, pay later route. This typically involves splitting the cost of a product into equal amounts and submitting payments on a schedule. It sounds simple, but risks are involved, such as unexpected fees. Tap or click here to check out our report on BNPL programs.
Autopay is a great way to avoid late fees and interest on some things (primarily monthly payments that never change), but it’s not a good idea for every recurring charge. We put together a list of bills you should not put on autopay.
1. Annual subscriptions
You’ll usually see that an annual subscription will cost less over a year than a monthly one. The problem is that they’re easy to forget and could hit your bank account hard when you least expect it. If you don’t have enough in the bank to pay it, you’ll be hit with an overdraft fee on top of the account’s cost.
Annual subscriptions are available for magazines/newspapers, auto insurance, retail memberships, sample boxes and more. Go ahead and subscribe for a year but do not use autopay.
2. Streaming services (monthly)
Streaming services help cut the cord but carry the same payment plans as cable. It’s easy to forget all your services, especially if different family members have their preferences. Even if you live alone, you may not be using all the services you’re paying for.
Look into your subscriptions and drop the ones you’re not using: Netflix, HBO Max, Spotify, Amazon Prime Video, Hulu, Disney+, Paramount+, Peacock and whatever else you’ve signed up for. For the remainder, avoid autopay.
3. Cell phone bills
Cell phone bills can fluctuate when you’re not on an unlimited plan. Depending on your data usage, the amount you owe can change from one month to the next. You could have one hectic month that leads to a higher bill than expected, which leads to a bigger hit on your bank account.
On top of this, some plans don’t use the same billing date each month. It could be a monthly cycle that will change depending on how many days are in each month. Again, this can catch you off guard. Get out of autopay and keep an eye on your cellphone bill. You could spot some billing errors in your favor.
4. Cable/satellite and utility bills
As with cell phone payments, cable and utility bills can fluctuate monthly, depending on your usage. You may order more movies on demand during the winter months with cable. And you’re probably cranking the heat during those same months, raising your utility bill.
Cable and satellite companies sometimes add fees to new channels and networks you may not even be watching. Make a one-time payment and review each bill to ensure you’re not paying for something you’re not using.
Putting utilities on autopay will make you less likely to scour your bills regularly. A sudden spike in the utility bill could indicate a problem such as a leak. Is your electricity bill surging? It could be an old appliance sucking up too much juice. That’s why it’s a good idea to avoid autopay for utilities.
5. Gym memberships
We get it. It’s the new year, and people want to get in shape. Not everyone can afford home equipment, and a gym membership can offer everything you need. But watch out for hungry managers who will do everything to get you to sign up for a recurring monthly or even yearly membership.
Committing to a gym is not easy, no matter how well you plan it. Life happens, and you may go more in one month than the next. If you pay monthly, you can evaluate your usage and decide if it’s worth sticking around.