Maximize Your Savings with Autopay: A Comprehensive Guide

Just as certain as death and taxes, bills are an inevitable part of life. While some companies mandate automatic payments without offering any extra benefits, others provide enticing discounts to encourage customers to opt for autopay. Although you won’t find autopay discounts on your credit card bill, there are several common types of bills where you can save money by switching to autopay. In this blog, we’ll explore these opportunities and provide tips on managing your autopay effectively.

6 Bills That Offer Autopay Discounts

If you’re still paying bills manually, switching to automatic payments can streamline your finances and save you money. Be aware that some companies offer autopay discounts only when payments are made from a bank account or debit card, not a credit card. Here are six common types of bills where you can often find autopay savings:

1. Cellphone Service

Major mobile phone companies like Verizon, T-Mobile, and AT&T offer autopay discounts for customers who opt in. Savings range from $5 to $10 per line, per month, depending on the payment method. Typically, you must also sign up for paperless billing to receive the savings.

2. Internet/Cable TV

Internet and cable TV companies are among the most common providers to offer autopay discounts. These service providers typically give customers $5 to $10 off their bill each month for being on autopay.

3. Insurance Premiums

Some car insurance companies offer reduced premiums if you pay them upfront annually. If you choose to pay quarterly or monthly, you can often get a discount for setting up autopay. For example, USAA offers up to 3% off auto insurance premiums for using autopay. You might also find autopay discounts for home insurance, renters insurance, and life insurance.

4. Student Loans

Both federal and private student loans typically offer autopay discounts. Instead of a flat amount off, automatic payments on student loans usually reduce your interest rate. Expect a discount of 0.25% for enrolling in autopay.

5. Car Loans

If you have an auto loan, switching from manual payments to autopay can help you pay off your balance faster. Several banks offer 0.25% off auto loan interest rates for enrolling in automatic payments. Be sure to read the fine print, as some banks require the autopay to come from a checking or savings account at the same bank.

6. Other Loans

While not all lenders offer a discount for automatic payments, you might find autopay discounts on personal loans or home equity lines of credit. It’s worth checking with your lender to see if any discounts are available.

Check for Other Opportunities

You may find other autopay discounts for products, services, and companies you pay for regularly. For example, if you use a daycare for your kids or a doggie daycare for your pet, you might find an autopay discount available for regulars. Do some research on your recurring bills to ensure you’re not missing out on any savings.

Benefits of Setting Up Autopay

Even if there’s no discount, switching to autopay can benefit you in several ways:

• Pay less: When switching to autopay is incentivized, you get a discount on your bill amount or interest rate, which can add up.
• Avoid fees: Autopay ensures you’ll never pay a late fee since your bill will automatically be paid on time, every time. No more forgetting a bill due date and making late payments.
• Help build credit: One of the most important factors in your credit score is your payment history. Since autopay simplifies on-time payments every month, you’re not just avoiding fees but also helping build or improve your credit.
• Save time: Time is money, and having autopay means less time spent checking your bills’ due dates and making manual payments. It’s all conveniently taken care of for you.

How to Manage Bill Autopay

While autopay has its perks, there can be downsides if you’re not strategic. Use these tactics to ensure automatic payments help you rather than hurt you:

1. Work It Into Your Budget

One possible challenge is that your automatic payments will likely draw at different times throughout the month. This can create a budgeting nightmare if you don’t keep track of what charges when, especially if it’s not timed well with your paycheck and you might not have enough in your checking account to cover it.

Autopay can also be tricky for budgeting if you have bills that fluctuate monthly, such as energy bills. For bills with significant fluctuations, where it feels risky to have that amount pulled automatically, perhaps keep that bill one you pay manually.

You can also try to adjust the billing’s timing to accommodate your budget. When you sign up for autopay, you might be asked to select your monthly bill date, and sometimes you can adjust it later. Depending on your situation, it could be easier to sync them up so they all bill at the same time or spread out throughout the month.

2. Keep Track of Balances

When companies bill you through autopay, they can’t see your balances, so the transaction initiates whether you actually have enough money in your bank account or not. This isn’t an issue for credit card payments, but as noted, some autopay programs don’t permit credit cards.

If you don’t have enough money in your bank account when autopay processes, you’ll overdraw your account and likely get hit with a fee from your bank. You might also face fees from the service provider for returned payment, and if a bill goes unpaid for a while, it could damage your credit or cause you to lose service from that provider. Consider creating recurring calendar reminders that notify you a day or two before your autopay runs so you can double-check that your balance is sufficient.

3. Update New Card Info ASAP

If you’ve ever received a new credit or debit card in the mail, you know the headache of updating payment info on all your accounts. But if you have autopay set up, it’s especially vital to update your payment details immediately so the company doesn’t bill your old account and charge a returned payment or late payment fee.

Go through your latest statements to refresh your memory about which businesses charge you automatically so you can update them all right away.

4. Do It Yourself

Getting a discount for using autopay is ideal, but even if savings aren’t offered, consider switching to autopay anyway for its assistance with money management. If a company you pay regularly doesn’t offer automatic payments, many banks and credit unions have free bill pay services that let customers set up automatic payments. Find out if any of your accounts have this feature, so you can still get some of the same benefits by doing it your way.

The Bottom Line

Switching to autopay can be an easy way to save a few bucks on your bills each month. But don’t discount the benefits of using autopay even if no savings are offered. It helps keep you paying all of your bills on time every month, which, more than anything, could help strengthen your credit score. If you have a history of late or missed payments, it’s a great time to start monitoring your credit for free on Experian. As you switch your bills over to autopay and build a strong repayment history, you could see your credit score rise in return.

At O1ne Mortgage, we understand the importance of managing your finances effectively. If you’re looking for mortgage services, don’t hesitate to call us at 213-732-3074. Our team of experts is here to help you navigate your mortgage needs with ease and confidence.