What bills should you not put on autopay?

Autopay’s Pitfalls: Bills You Should Still Review Manually

Autopay is a modern convenience that promises ease and efficiency. Setting it up for recurring bills can free up mental space and potentially even snag you a discount or rewards points. However, blindly trusting autopilot can sometimes lead you down a financial blind alley. While convenient for many routine expenses, there are specific types of bills you should carefully reconsider before handing over complete automated access.

The key reason? The risk of unexpected charges and hidden errors that fly under the radar.

Think about it: How closely do you examine your bills after setting up autopay? For many, the answer is “not at all.” This hands-off approach can be problematic, especially when dealing with bills susceptible to fluctuation or prone to occasional inaccuracies.

Here are some bills you should think twice about putting on autopay:

• Utility Bills (Especially Heating & Water): Yes, paying your electricity or water bill automatically sounds great. However, utility bills are notoriously prone to unpredictable spikes. Seasonal changes in temperature can dramatically increase your heating or cooling costs. Leaks, faulty appliances, or even a guest staying for an extended period can inflate water usage. Autopay on these bills can lead to large, unexpected deductions from your account, potentially causing overdraft fees or disrupting your budgeting. Before setting up autopay, diligently scrutinize several months of statements to identify trends and understand potential fluctuations. Continue to review them manually, even after automation, to ensure you’re not paying for unexpected consumption or billing errors.

• Healthcare Bills: Medical billing is often a labyrinth of codes and charges. Errors are surprisingly common, and understanding the breakdown of costs can be challenging. Putting healthcare bills on autopay without careful review is a recipe for potentially overpaying or unknowingly agreeing to charges you shouldn’t be responsible for. Always request an itemized bill, compare it to your insurance explanation of benefits (EOB), and ensure all charges are accurate before authorizing payment, automated or otherwise.

• Bills with Variable Usage or Charges (e.g., Credit Cards with High Spending Variability): While autopay for the minimum payment on a credit card can be a good idea to avoid late fees and protect your credit score, setting it up for the full statement balance when your spending habits fluctuate significantly can be risky. A month of high spending followed by automatic withdrawal could lead to a depleted bank account and potential financial strain. Similarly, bills that rely heavily on your actual usage, such as phone bills with data overage charges, warrant close monitoring.

• Bills from New or Unfamiliar Providers: Before setting up autopay with a new vendor or service provider, take the time to thoroughly understand their billing practices and policies. Read the fine print of the contract and carefully examine the first few statements to ensure accuracy. It’s better to wait a few months and manually pay before fully committing to autopay with a company you’re not yet comfortable with.

The Takeaway:

Autopay can be a fantastic tool for streamlining your finances. However, it’s crucial to remain vigilant and avoid the trap of blind faith. By consciously reviewing certain bills manually, you can protect yourself from unexpected charges, detect potential errors, and maintain control over your financial well-being. Think of it as a partnership – autopay handles the routine, while you provide the crucial oversight to ensure accuracy and prevent surprises.