Credit Cards: To 'Auto-Pay'...or not to 'Auto-Pay' ?

cathie54June 26, 2006

Been stuck on this for several months.

I have balances on some credit cards.

I have ONE CC that I set up for auto-pay (minimum balance due only) years ago.

What I didn't know was that they wait until the very last day pymt is due to "auto-pay" - thus maximizing on finance charges.

I realized this fact first statement after auto-pay took effect.

I still get statements, and I still make additional pymts on those statements, even tho I have auto-pay for min due.

NOW - with all the changes in terms, etc., I've been contemplating putting some other CC's on auto pay for minimum due. (But still making additional pymts every month towards each)

Reasoning being I'm afraid of that ONE TIME I may forget or make late payment - fear of ALL my LOW APR's to jump sky high!

Easy to sign up for - just call them!

BUT - upon further research, found you cannot "just call" to cancel auto-pay. Must be done in writing.

TWO issues I have:

1) Not sure I want to "connect" these CC companies to my bank account.

2) If I were to die, they can still keep collecting minimum pymt due till paid in full ???? (OR, is it frozen at that time?)

or, what if I just end up incapacitated one way or another to the point I cannot "write to cancel" ??? (coma, stroke, etc.)

I'd certainly hate to be dead, and CC's still taking money for 30 years! LOL!

I DO love the idea of auto-pay. I do NOT like the idea of them "digging into my acc't" if something terrible happens and I'm not able to stop the auto-pay.

Any thoughts on this?

Anyone have experience with this?

Interested in the pros & cons.

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Chemocurl zn5b/6a Indiana

I love autopay. Like you said, it is a guarantee that it will always be paid on time. There have been times b4 when I was off my feet (so to speak) before I got things set up, and I was late on some things occasionally. I also then send the balance (minus the auto pay amount) so the card is paid in full each month. Occasionally life gets too busy though and the due date slips up and they either get to collect a small interest charge, or I pay by phone (at the last minute). Some will take phone payments at no charge, if you do it with their phone response system.

If you were to die, hopefully there would be someone handling all your matters. I think oftentimes a bank account is frozen, until an administrator comes forward.

After your passing the credit card companies would still be due their money. I've never seen them take anything from my account when there was nothing owed.

I see no reason for me to ever cancel the autopay on anything. I'm planning on doing a lot of living yet, and want things handy for myself. After I'm gone, it will then be someone elses responsibility, and no longer my concern.

I really don't see any cons, as I keep a very watchful eye on all statements, though sometimes not in a vary timely fashion.

    Bookmark   June 26, 2006 at 12:57PM
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Cathie, Many years ago I had the same problem you had with the Autopay going out on the day it was due.

Check your Credit Card statements for the date they get the payments. If the payment is always say 2 days late to the CC company then change your autopay so it is paid 3 or 4 days earlier than it is actually due.

    Bookmark   June 26, 2006 at 3:04PM
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Ask your bank.

I'm fairly that on your death, the account is frozen - as of when the bank finds out about it.

Which is the reason that some families have the other spouse have a joint account or some source of income available, should that account be unavailable for a time until the executor gets it operational again.

Not so for disability, or course.

But if you're disabled ... you still owe them. And you wouldn't want to be incurring extra finance charges due to late payments, I expect.

But - you have a power of attorney for financial affairs, I'm sure??? Also for health, no doubt??

In case you're speechless (but not dead)??

Good wishes for getting your financial affairs in good order.

ole joyful

P.S. Should you be able to get all of those balances paid off, you could keep all of those finance charges in your own pocket.

Then be sure to not charge more than you can pay off every month.

Then you get the free ride - and the people paying those high rates of interest, fees, etc. are the ones paying the freight.

o j

    Bookmark   June 26, 2006 at 5:54PM
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I would never use autopay from the cardholder bank side, but I do pay all my bills online through MY bank's online payment service. The payment service does an electronic payment if the payee supports it, or if not they will print and mail a physical check. Credit card payment typically are electronic since they're directed to another bank, and post to the payee the next day. I always schedule payment dates several days early. The payment process actually triggers about five days before that to allow for processing.

    Bookmark   June 26, 2006 at 6:24PM
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Hello all,
The one and only auto-pay I have set up is thru my old credit union account. I have auto-deposit there for my checks. The CC with the auto-pay is also issued with/through them. (So, I'm not concerned about THAT one, since they already are "connected" - so to speak.) Also, that CC is the one I use for general purposes with a very low balance. I've not had a problem with that, nor any concerns, BECAUSE it is always a low balance - or paid off.

It started out (while I was working) - I could opt a specific amount deducted fm paycheck every WEEK (remember the good old days when you got paid weekly?!!! lol), and automatic pymts to pay for my "one and only new car I ever bot". I LOVED it! (The car was also funded thru my credit union).

I'd like auto-pay for TWO other cc's, but I don't want the cc's to have direct access to my cr. union acct.

I also have a regular bank account which I've had for a very long time, (checking only - I dumped my savings due to their ridiculous monthly fees), and I use this to pay bills. I HATE this bank, but I've had my acc't for about 30 years - so don't want to close the account.

What I've been doing for several years is writing a ck fm Cr. Union to deposit into my "regular bank scct" - but only enough to cover bills that I am paying (plus a small "buffer"), so that they make minimal $ on MY $. My balance is always VERY LOW in this account. (I REALLY hate this bank!)

I considered setting up CR Union to make auto-deposits to my regular bank. (BUT, then again, I hate to "connect" the two.) And then set up auto-pay on cc's thru THAT account.

PLUS, IF I did that, it would be under what I pay out each month,-(utilities, etc.), So...I would STILL have to write another check and go to ATM to make additional deposit every month.

Sounds messy, huh? lol! Well, it is!

I don't want to close out my regular bank acc't. Too old - and good for FICO???
I WON'T close out my Credit Union - also, too old. (plus I get lot's of benefits.)

I've always been against the "online" pay method -
Due to various reasons which I will spare you deatils! haha
(In general - don't want to RELY on computer do to "crashes". afraid of change, many phishings, and just don't really understand how it works, etc...PLUS, I do NOT want emails to remind/inform me of this or that - I prefer paper coming thru regular mail.)

BUT...hubby and son DO pay some bills online. I talked to hubby last night about how it works.

I've decided to try it. (Slowly at first - & with a watchful eye)

Check out Cr union online options first. See what I can/cannot do online.

Sign up for that bank I hate - see what's available - what I can/cannot do - and if there are any FEES.

Do an EFT fm Cr union to that bank. See how that works out.

If all OK, check into CC's, see what. Try to make pymts online. (I'll start with one specific one first - see how it goes.)

As long as I still get my paper statements in the regular mail each month with it all itemized...

Hubby DID warn me that when I do the EFT - could take 3-5 days for it to go thru...(but then, it takes that time for regular mail also - for paying bills, that is.) I'll just have to do any bank TRFs a few days ahead.

So, I have a lot to check into in next several days.
Wish me luck! LOL!

    Bookmark   June 30, 2006 at 5:35AM
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I was late twice on one cc (by ONE DAY) a few years back, and got slammed with the late fee. I went back thru my statements and found almost always - the DUE DATE was on a weekend - usually a Sunday or Holiday.
Needless to say, I was not happy. But I paid the "late" fee. I knew my pymts should have arrived on time. I think they weren't "working" on those Sundays/Holidays - even tho THAT was the DUE DATE.
After finding a pattern, I called and complained (like it mattered - haha), but at least THEY knew that I knew!
The good thing - It didn't make a ding on my credit report, AND, my APR's didn't jump. BUT, so much has changed since then - I do not want another "one day late" on ANYTHING.

    Bookmark   June 30, 2006 at 6:03AM
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I know people who like to use auto-pay, but I had problems stopping some payments so I don't use it anymore. Here's a link about it that you might find of interest.

I would never have my main checking account connected to anything that allows a third party access to my funds. I'd probably have a checking account with a totally separate bank if I did any online banking. Just in case.

There is something in today's paper about how 9.9 million computers are infected with keyloggers. Something else to keep in mind when doing electronic banking.

    Bookmark   July 1, 2006 at 8:04PM
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I like auto pay for bill paying. Living alone and a little older, my reasoning is if something unexpected should happen to me and I am out of touch for a month at least I won't have to worry about bills being paid. All utilities are paid by credit card automatically and credit card is set up with checking account to be automatically paid off. Has worked fine. In a couple of instances where there has been a dispute I can review CC charges before hand and then call the company. In one instance CC was double paid with the checking account and the bank was able to reverse it. Been doing this for 10 years and so far am happy.

    Bookmark   July 6, 2006 at 10:59AM
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I'd consolidate all your cards into the one with the lowest interest charge. Then pay off as much as possible on that credit card every month until you have it paid off. Then make sure that you pay your cards off in full every month. That way you don't have to worry about any charges or fees.

The only times I've missed getting payments in on time, I've called and they have waived the late fee and finance charges.

    Bookmark   July 11, 2006 at 10:27PM
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I want to thank all who provided info. (dreamgarden - thx for the link and the 9.9 mil - I read them...pretty spooky).

I spent many hours last week reading/researching/calling for more info about the "agreement terms" - (OK, well I haven't read ALL the terms yet thoroughly, but as I scanned, it raised some questions).

I spent most of yesterday reading up on CC stuff, and I'm totally appalled at what I've read. Some of what I read I was aware of - some was news to me. "CC TRICKS"

I haven't yet signed up for anything, as I got mixed answers from my questions over the phone.

There's good chance I may just go on paying as I've been, and not do the "auto-pay" thing. It just doesn't offer 'everything' I was hoping for, and I see some risk involved. (Either way, there is risk involved)
I can see I have more work to do - questions to ask, things to consider...

    Bookmark   July 18, 2006 at 9:43AM
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