Money tip: 5 bills you should never put on autopay
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 for 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.
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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 living alone, you may not use 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. Cellphone bills
Cellphone 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.
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If you have an ongoing subscription service, the easiest way to pay is to set up an autopay plan. If you’re worried about late fees and interest, autopay is one way to avoid those penalties.
While you may be tempted to spread autopayment plans around, some recurring charges are better off being paid as you go. For example, an annual fee may cost less per month than a monthly charge, but it could hit you hard when that annual payment comes due. Tap or click here for five bills you should never put on autopay.
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