The major credit card issuers all offer the option to set up automatic payments. Credit card auto pay is convenient, but there’s one major drawback to consider before you sign up for it.
In this article, I’ll share why I don’t use auto pay with my credit cards and what I do instead.
Pros and Cons of Automatic Credit Card Payments
First, let’s review the advantages of auto pay:
- By setting up automatic payments for your credit cards, you’ll never have to worry about late fees or damage to your credit score because you forgot to pay a bill.
- Auto pay is easier and faster than manual payments. It’s a “set it and forget it” approach to paying your credit card bills.
As long as you have enough money in your bank account to cover your automatic credit card payments, the risks of auto pay are minimal. But I’ve found that auto pay can be bad for your monthly budget.
That’s the one major downside I’ve experienced when I’ve tried automatic payments.
If you have auto pay set up and don’t check your credit card transactions frequently, you may be overspending without realizing it.
Skip Auto Pay and Try This Instead
Instead of using auto pay, I log in to my credit card accounts every Friday as part of my weekly financial routine to analyze my transactions and spot any wasteful spending.
I’ll use this weekly check-in to pay off my credit card balances in full, which helps me maintain an 800+ credit score.
If you’re not in the position to pay off your entire credit card balance on a weekly basis, try to make the minimum payment every week. You’ll pay less interest and get out of debt faster.
My financial routine requires about 10 minutes a week, but it’s better for your wallet than auto pay — trust me.
To get started, pick a day and time when you can commit to going through my five-step weekly financial checklist. Then, set a calendar reminder so that you don’t forget to do it!
You can watch the video below to see my step-by-step process or read this related article.
If I try to cancel auto pay exactly how long does it take to be cancelled
It should be immediate, then you can go forward with manual payments. You should get a confirmation when you cancel auto pay.