Addressing the Downside of Automatic Bill Pay
I was just quoted in GOBankingRates! The article by Heather Taylor discusses the pros and cons of automatic bill paying. Great article! I have all my bills set up for automatic payment and use the strategy I mentioned with the separate credit cards. Since I make this recommendation quite a lot, I thought I’d expand upon one of the cons of automatic payments and what to do about it.
If your credit card is stolen or closed due to fraud, you’ll need to update all your billing information. This can be a big hassle because of the additional work you’ll need to do to reset your billing information. Also, there is usually a slight delay of a couple of days to get a replacement card. Depending on when in your billing cycle this happens, some of your monthly bills might not get paid on time. You wouldn’t want a late fee on top of the unnerving feeling of your information being hacked!
If this happens, first you’d need to list all your bills and know how each bill is paid. Don’t forget annual or semi-annual bills! You may even want to change your passwords while you’re in your account profiles. Give yourself time to methodically go through each account to check and update your information. If you have a Life Organizer where you’ve listed your accounts and details including how it’s paid and the payment due date, that will make this much easier.
There are ways to minimize the risk of an important bill not getting paid by dedicating a separate credit card to your monthly automatic bills like utilities and medical premiums. Once set up, this card should be put away in your fire safe box at home because the idea is you’ll never use it for anything else except those specific bills. You won’t take it out of the house and risk losing your wallet or use that card for online shopping where the sites may not be as secure. If a different credit card is used for online shopping, the aftermath of dealing with fraud can be done much easier.
Automatic bill payment is a great idea because it is one less thing off your plate every month. We’re all busy people and a great way to spend more of your precious time on the things you love is to automate bill payments. The downsides of this can be managed as well with just a little planning!