Should You Set Up an Automatic Payment For Your Credit Card Bills?

Autopay or automatic payments sure is a convenient way of paying your bill on time or even saving from interest rates. This service is provided by every bank to make sure that every user can make their payments timely. However, to use it or not is completely on you since you authorize the payments.

Surely, sometimes you just don’t have one payment that you can track but many for which you cannot. Automatic payments are very useful where you can schedule a payment and it will take out the same amount from your Credit card bills every month which will remove the hassle of freaking out on every due date.

Types of Automatic Payment you Can set at your Convenience

How you wish to set up your automatic payments is totally under your control. While signing in for an automatic payment, you can choose the amount of the payment you want to make for your Credit card bills monthly. There are typically the following types of autopay options;

Paying the minimum due is one of the safe measures where you can make the payment but are unable to make it as a whole. Here it allows you to make your payment into EMIs or break the whole payment into a few parts.

Paying the full balance is the best choice if you are a frequent user. Setting up a payment for this type of payment, you need to make sure that the account you are making payment from has the balance to do so. But if you are making a heavy purchase suppose you are getting a pricey new computer and you forgot that you are set on the whole payment, things can get ugly when the amount gets deducted from your account.

Paying a fixed amount which is more than your minimum payment if you are focusing on repaying the debt rather than making more purchases from the card. But if you keep on making new purchases and have set the autopay on an amount that is even lower than the minimum due, here is a huge issue. You will get charged on your outstanding bill as well as on the new purchases.

Although you can Pay Credit card bills for one credit card with the help of another credit card, not just savings or salary account credit card companies discourage this type of transaction. Autopay might as well give you some discounts on your payment if they are on time, rewards are also in trend along with cashback.

Advantages of Autopay:

It gives you a better credit score improving your economical value.
It saves a lot of time from generating bills, processing payments, and enquiring about delayed payments.
If you are a business owner your company can incur substantial savings on your supplies like envelopes, stationary, postages, etc.
It increases your payment security as well and is very eco-friendly.
Take care of your bills on time, no overdue means no unnecessary charges.
Less paperwork is one of the benefits if you hate to go through it.
Autopay can turn out to be an ideal solution for your hassle of remembering to pay your bill. It is more like a safety net, with this you will never fall out on your Credit card bills.

Disadvantages of Autopay:

As there are pros, there are cons of automatic payments as well, and here are they;
Risk of over-drafting will be there. If you set up a payment and that account does not have sufficient funds to cover the cost, you can overdraft your account which can charge you a high overdraft fee charged by your bank.
There is a risk of ending up carrying a balance. If you schedule a payment for the minimum payment due instead the full payment which is due, you end up carrying the balance forward until and unless you pay the whole bill in full by yourself.
Automatic payment makes it hard to keep track of your spending. You will have to manually log in to review your statement to keep track of the expenditures.
Ultimately even after signing in continuously keep track of your expenditures and even your payments. However, automatic payment does make it easier for users to keep the due date and Credit card bills monthly.

How to make set up an autopay

Few examples of the different banks to set up autopay step by step:

HDFC Bank

Step 1 – Log in to your bank account through the net banking portal.
Step 2 – From your dashboard, go to the cards section.
Step 3 – Locate the credit card option and select it.
Step 4 –On the credit card page, find the option of ‘Autopay register’ and select it.
Step 5- Fill up the details and click ‘continue’ and ‘confirm’.

SBI Bank

Step 1 – Login to your bank account through the net banking portal.
Step 2 – Click on ‘bill payment’ and go to the ‘manage biller’ section
Step 3 – Select the ‘add’ option and click on all Indian billers to select ‘SBI cards and payment services Pvt, ltd.’ As the biller.
Step 4 – Register your details and then click on ‘submit’ after this you will receive an OTP (one-time password) on your registered mobile number.
Step 5 – Enter OTP and approve your details on the biller.

AXIS Bank

Step 1 – Login to your bank account through the net banking portal.
Step 2 – Click the ‘cards’ and then select ‘auto debit’.
Step 3 – choose or fill in the details and click ‘submit’.
Step 4 – Select the payment option and click on ‘submit’

Even setting up automatic payments is very easy, you can either do it by phone with your card provider or through your bank mobile app, or online. When you set up auto-pay that makes your card issuer is authorized to take payments from your bank account on the scheduled date and amount.

Bottom line

You will have to keep all the advantages and disadvantages in mind while going for the automatic payment setup. Do not get attracted by the discounts and the no-hassle process, make sure you are setting up the payments only when you have a flush sum in your account. Wise decisions are never regretted.