Consumer Watch: The pros and cons of auto pay
OKLAHOMA CITY (KOKH) —
Late payments can happen because of forgetfulness, and automatic payments could be a problem solver. However, depending on automatic payments for your bills could result in a different set of financial problems.
Here are the top three potential issues with having all your bills on auto pay.
1. If you are one of the nearly 80-percent of Americans living pay check to pay check, putting most or all of your bills on auto payment could cause you to overdraft, and be on the hook for costly fees.
2. It is also possible for a company to accidentally over charge you. If your bill is set on auto payment, you could lose a lot of money. It would affect your ability to pay other bills on time while you work to correct the error.
3. The last major problem with auto pay is that you get too comfortable. Maybe you pay for several video streaming services, but you aren't watching one of them anymore. If you don't regularly review your charges, you could accidentally keep paying for something you're not using.
If you choose to use auto pay, you should know it is considered a secure form of payments, but if you have cash flow concerns, consider using it for only some of your bills.
Financial professionals still recommend checking in on your finances once or twice a month even if you use auto pay. This will ensure you can quickly correct any possible problems or make changes that impact your budget.