Introduction

Just as death and taxes are certain, so are bills. Some companies make sure of it by requiring automatic payments without any extra benefit (think gym memberships or streaming services). However, other companies offer discounts to incentivize customers to pay automatically. In this article, we will explore the benefits of setting up autopay, the types of bills that offer autopay discounts, and how to manage your bill autopay effectively.

6 Bills That Offer Autopay Discounts

If you’re still paying bills one by one, switching to automatic payments can streamline your personal finances while saving you money. Here are six common types of bills where you can often find autopay savings:

1. Cellphone Service

Major mobile phone companies, such as 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, though you typically must also sign up for paperless billing to get the savings.

2. Internet/Cable TV

One of the most common places to find autopay discounts is with internet and cable TV companies. These service providers also 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 knocks off up to 3% of auto insurance premiums for using autopay. You might also be able to find autopay discounts for home insurance, renters insurance, and life insurance.

4. Student Loans

It’s typical for both federal and private student loans to have autopay discounts. Rather than giving you a flat amount off, automatic payments on student loans typically reduce your interest rate. Expect to enjoy a discount of 0.25% for enrolling.

5. Car Loans

If you have an auto loan, switching from manual payments to autopay can make a dent in your balance faster. Several banks offer 0.25% off auto loan interest rates for enrolling in automatic payments. Just read the fine print; one example required the autopay to come from a checking or savings account at that same bank.

6. Other Loans

While lenders usually always offer an automatic payment option, not all offer a discount for it, particularly mortgages. However, you might find autopay discounts on other forms of borrowing, such as personal loans or home equity lines of credit.

Benefits of Setting Up Autopay

If you have bills with optional autopay, switching to it can benefit you in a surprising number of ways, even if there’s not a discount:

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 helping build or improve your credit.

Save Time

Time is money, and having autopay means less time sitting down to check your bills’ due dates and make manual payments. It’s all conveniently taken care of for you.

How to Manage Bill Autopay

Autopay clearly has its perks, but there can be downsides if you’re not strategic. Use these tactics to make sure automatic payments help you rather than hurt you:

Work It Into Your Budget

One possible challenge is that your automatic payments will likely draw at all 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.

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 we noted, some autopay programs don’t permit credit cards.

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.

Do It Yourself

Getting a discount for using autopay is ideal, but even if savings isn’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.

Contact Us

At O1ne Mortgage, we are committed to helping you manage your finances effectively. If you have any mortgage service needs, don’t hesitate to call us at 213-732-3074. Our team of experts is here to assist you every step of the way.