I am considering setting up all my bills online to automatically charge to my credit card each month, but I am not totally sold on the idea yet.
I track, log, and file my expenses regularly, and I try to be mindful of how and where I share my information. For example, I only use one credit card to make online purchase (which is not often), but never my other card.
When electronic banking was in its infancy, I remember hearing horror stories from people who had bad experiences with automatic drafts from their checking account, such as being hit with a bill at the wrong time or out of sequence with their paychecks, or being charged twice from institutions, etc.
Although I do online banking now, nothing is set up to automatically charge or deduct to or from any account. No money gets transferred until I say so, and I prefer to have that kind of control. But the autopay option linked to a credit card certainly seems convenient, and the benefits seem straight forward. However, the problems could be myriad, so I am wondering if anyone has had any experiences or "lessons learned" that they'd care to share.
Also, I've heard it mentioned that people will use PayPal to manage their online charges instead. I don't have a PayPal account, but does anyone have any experience with that?
meaning money has been withdrawn and it was a hassle rectifying the situation.
Which is precisely why I don't use or have a debit card or an ATM card. If it gets stolen, your money can be gone, which means you have nothing to pay your bills. But if it is your credit card, it may be a hassle, but your money is still in the bank.
I've had to cancel credit cards two or three times because someone online hacks a server or sequences the numbers and attempts to make a purchase. The banks have been pretty good about declining the transaction though when that takes place.
I've always had experiences with the process, though I only have a couple small things set up for automatic payment. A beer club, a tobacco club, my ISP.
However, if you're going to go that route at all, it is probably good sense to also utilize something like Lifelock or some service similar to that. (ID theft prevention type companies) and speak to your bank about activity monitoring services.
LIke the rest of the universe, when it goes well, it goes very well. When there's a problem, especially at first, Oh, brother!
When problems have arisen, the issue mostly seems to be (PayPal's transparency to the evildoers aside), is that the folks on the front line at the receiving end never seem to be either well trained or around very long. Poor training, poor experience, poor customer service + PO'd and confused user.
Poor training, poor experience, poor customer service + PO'd and confused user.
You just described corporate America.
I use autopay only to pay the bank. I'll use it for my car payments and insurance. Other than that, I tend to stay away from it.
I was not either, so I did the reverse. Rather then giving the biller a blank check to draw on my account as they saw fit, I auto draft them a check.
I have an account called the auto pay account. I pull a chunk out of each pay check to cover the bills throughout the month. It removes the variance in my main account.
This works well for most expenses. In the case of water where it varies a bit but is not too expensive I simply add $5-10 to my average bill and run a surplus most to the time. Yes it builds up on their side but I know exactly what my monthly bills look like.
The one bill I can't do this with is power as that varies a good bit. For that defaulting to the credit card work would I guess. Personally as that is the one bill I really can effect I prefer to have to look at it. The rest are really just set costs of living as I choose to and so auto drafting a check simply removes a chore.
The thing about auto drafting the check is that I have full easy control to cut it off as I choose.
+1 I like that idea of an account just for bills. Time to discuss this with my wife.
It makes life really easy. You look at one account for if you can buy some odd thing knowing all the rest of the money is allocated elsewhere so you don't run short on the important things.
get a rewards credit card and use it just for bills then have another card for nornmal expenses, easier to track that way plus you earn points/miles/cashback for something you have to pay everymonth anyway. still continue to check bills to make sure there aren't any erors i think some people setup autopay and then think i never have to look at a bill again but youi wanna make sure its accurate your being charged correctly etc.
get a rewards credit card and use it just for bills then have another card for nornmal expenses...
One thing you have to consider though is that each time you open any kind of account or get a debit or credit card, you always take a negative hit on you credit score. Every inquiry, no matter what it is, even an employer, can deduct points from your score.
In some instances you only get a "soft hit," which records the inquiry but does not affect your score, but I cannot remember what kind of inquiries this would be.
You also have to consider that if you get a new credit card, your credit line will be really low, more than likely.
I have excellent credit, but when I got my sole-proprietorship business credit card, the bank lowered my credit limit on my existing card and then transferred that amount to the credit line on my business card.
That's not a problem for me, because between my two personal cards I probably have about a $30, 000 line of credit, as I've had them for decades. But the banker told me that if I were to app;ly for a third personal credit card today, that there's no way they'd ever extend me that much credit, or for anyone for that fact.
So although I've been tempted to cancel my cards in the past, it's better that I don't, really, as I'd never be able to obtain that kind of credit line again any time soon.
But my point is that opening up another credit card account may not always work in your favor.