Credit card autopay explained (automatic credit card payments)

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If you’re fed up with the hassle of remembering to make monthly payments for your credit card, you can explore the option of setting up autopay with your credit card provider. Autopay is a feature that automatically deducts your credit card balance or the minimum payment from your bank account each month.

Autopay isn’t unique to credit cards; it’s also widely available for various bills like utilities, subscription services, and memberships. However, some people might find it confusing or hesitate to use autopay specifically for their credit card bills. Here’s what you should be aware of before deciding to enroll in autopay with your credit card issuer.

What is credit card autopay?

Autopay, short for “automatic payments,” is a service provided by many credit card companies. It enables you to have your credit card balance or at least the minimum payment automatically withdrawn from your bank account as soon as your credit card statement becomes available.

This arrangement can be set up either through a phone call with your credit card issuer or by using their online platform. The payment is typically deducted from your bank account on the due date specified on your credit card bill, but some issuers might offer the flexibility to select a different payment date. Importantly, you have the option to stop this automatic payment feature at any time, giving you control over your payment process.

Who offers credit card autopay?

Several credit card issuers offer autopay options, which allow you to set up automatic payments for your credit card bills. Here’s a summary of how you can enroll in autopay with various issuers:

  • Chase: You can enroll in autopay with Chase online, through their mobile app, over the phone at 1-800-935-9935, or in person at a local Chase branch.
  • Discover: To set up autopay with Discover, you can enroll online, through the mobile app, or by calling customer service at 1-800-347-2683.
  • Barclays: Barclays offers autopay enrollment through their website, mobile app, or by calling customer service at 1-888-710-8756.
  • American Express: American Express provides autopay enrollment options through their online platform, the Amex app, or by calling American Express customer service at 1-800-528-4800.
  • Capital One: You can enroll in autopay with Capital One online, through their mobile app, or by calling customer service at 1-877-383-4802.
  • Bank of America: To set up autopay with Bank of America, you can enroll online or by calling customer service at 1-800-432-1000.
  • Wells Fargo: Wells Fargo offers autopay enrollment through their website, mobile app, over the phone at 1-800-869-3557, or in person at a Wells Fargo branch.

These options make it convenient for cardholders to automate their credit card bill payments based on their preferences and the issuer’s available enrollment methods.

Autopay options

Autopay options refer to the choices you have when setting up automatic payments with your credit card issuer. There are three options:

  1. Pay the minimum: This means that your credit card issuer will automatically deduct the minimum amount due on your bill each month from your bank account. It helps prevent late fees if you forget to make a payment on time. The minimum payment can vary – some issuers set a fixed amount, like $25, while others calculate it as a percentage of your total balance. However, if you only pay the minimum, you’ll end up paying a lot in interest over time. To avoid accumulating long-term debt, it’s advisable to make additional payments when possible if you choose this option.
  2. Pay the full balance: Opting for this option in autopay means that your credit card bill will be paid in full every month. It’s the best practice for credit cards because it prevents interest charges. However, you need to ensure your checking account always has enough funds to cover the full balance when the automatic withdrawal occurs. If you don’t have sufficient funds and the payment goes through, you might incur overdraft charges and a return payment fee from your credit card issuer.
  3. Pay a fixed amount: With this option, you set a specific amount to be automatically paid each month. It can be a useful strategy if you’re trying to reduce a large credit card balance gradually and want to budget for consistent payments. However, it’s important to note that if you pay less than your full balance, you’ll still accumulate interest. Setting up autopay for a fixed monthly amount can give you peace of mind if you’re concerned about missing a payment, but it won’t eliminate interest charges if you carry a balance.

In summary, when choosing autopay options, you need to consider your financial goals, your ability to cover the full balance, and your strategy for managing credit card debt.

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How do you start using Autopay?

Starting to use autopay is simple and can be done in a few ways:

  • Over the Phone: You can call your card issuer and set up autopay by providing your bank account details. They’ll debit your payment on a specific date each month, which can be your bill’s due date or a date of your choice.
  • Through Mobile Apps: Many card issuers offer mobile apps where you can set up autopay. You’ll typically find this option in your account settings.
  • Online: You can also set up autopay online by logging into your account. Look for the payments page or card payment settings to configure autopay.

Once autopay is set up, your card issuer will automatically deduct your monthly payment from your bank account on the chosen date. You can cancel autopay at any time.

If you’re working on paying off your credit card debt in smaller increments, some issuers allow you to set up multiple automatic payments in a month. Keep in mind that if you make manual payments in addition to autopay, the automatic payments will still occur as scheduled.

The benefits of autopay

The benefits of autopay are primarily related to avoiding late fees and protecting your credit score. When you set up automatic payments, it ensures that your bills, like your credit card, are paid on time, even when life gets busy.

This means you won’t forget to make a payment, which can lead to late fees and negatively impact your credit score. Automatic payments offer a reliable backup system to make sure you never miss a payment, giving you the convenience of using your credit card and earning rewards without the stress of remembering to pay your balance every month.

Things to consider before enrolling in autopay

Before signing up for autopay, it’s crucial to consider a few factors:

  • Current Financial Situation: Assess your current financial health. Ensure you have enough funds in your account to cover your bills. If you’re unsure about your financial stability, autopay might not be the best choice.
  • Monitoring Your Finances: Autopay simplifies bill payments, but it also means you may pay less attention to your credit card statements and spending habits. Keep in mind that it’s important to regularly review your transactions to catch any fraudulent or unexpected charges.
  • Risk of Overspending: When you set up autopay with your credit card, there’s a risk of overspending if you don’t keep a close eye on your account balance. This can lead to overdraft fees and additional financial stress.

In summary, while autopay offers convenience, it’s essential to be financially prepared, monitor your accounts, and avoid overspending to make the most of this payment method.

What to watch out for

Here are the key things to be cautious about when setting up automatic credit card payments:

  • Overdraft Fees: Automatic payments can be risky if your bank account doesn’t have enough money. You might face overdraft fees, which usually cost around $34, or your bank may decline the payment. To avoid this, keep an eye on your account balance and adjust the payment amount, perhaps to just the minimum required. Some banks offer text alerts for low balances to help you track your money.
  • Payment Date: Some credit card companies let you choose the date for automatic payments. It’s a good idea to set a date a few days before the due date to account for processing delays. Some, like Chase, process payments on the due date, even if it’s a weekend (in this case, it processes on the preceding Friday).
  • Errors and Fraud: Even with automatic payments, it’s important to regularly review your credit card statement for unfamiliar charges. Make it a routine to check for any incorrect or fraudulent transactions, so you can dispute them promptly.
  • Payment Amount: Credit card issuers typically offer options to pay the full balance, the minimum payment, or a fixed amount each month. Ideally, aim to pay off your entire balance to avoid interest charges. Paying only the minimum prevents late fees but leads to ongoing interest. Opting for a fixed amount is generally better than the minimum, although it could still result in carrying a balance or overpaying your credit card.

The bottom line

The value of autopay varies based on how you use it. If you want to avoid extra fees caused by forgetting to pay your bills, autopay is a good choice. However, if you don’t regularly check your credit card activity, using autopay might cause issues later on.

Autopay is a useful tool to prevent missed payment deadlines, but it doesn’t replace the need to carefully watch your accounts and spending habits.