Credit Tips: Automatic Credit Card Bill Pay

Posted On: June 1, 2006

Author: hesiden
Posted: Tue Jan 25, 2005 3:14 pm
Post subject: Auto bill pay

Looking for the down side if any to this auto bill pay

http://www.discovercard.com/discover/data/account/autobillpay/

It is not like electroic bill pay I currently use to pay bills. This asks you to contact your utility company, ect. so they can charge your discover card monthly automaticly. You then get the %1 cash back.

Assuming you’d pay off the card monthly anyway, what is the down side? The utility company probably gets its money a little sooner, but with the grace period you probably pay about the same time anyway.

I assume you cannot set up your home payments like this? 1% back on that would really be nice

Author: hesiden
Posted: Wed Jan 26, 2005 9:24 pm
Post subject: Re: Auto bill pay

Answering my own question. I couldn’t find any down side. My land line phone, cell phone, and cable/ISP companies will charge my discover monthly. They each had various options where I could set the date to pay automaticly such as due day or X days in advance of due date or login to the company web site and pay manually or even click on a button in an e-bill to pay. My electric and gas companies would only “auto pay” directly to a bank account not a credit card.

I suppose one down side is it would be a pain to use a balance transfer special deal on this card now since I have several utilites billing the card automaticly.

Author: Polonius
Posted: Thu Jan 27, 2005 1:11 am
Post subject: Automatic Credit Card Bill Pay

The downside is that you’ve lost control. The payment is billed based on what the merchant says it is, without your approval.

Usually there’s no problem. But what if you’re using it for your electricity bill and someone reads the meter wrong or punches the meter reading incorrectly into your account? Your bill could be thousands of dollars–and it would be paid. If it were mailed to you, you’d call the company and get the bill corrected. But if the payments are automatic, you won’t have that option. Your Discover card will be overlimit, your other charges will be declined, your credit score will go down, other creditors will cancel credit/reduce credit/raise interest rates.

Yes, it’s a far-fetched scenario. But it only has to happen once to make this not worth the savings. You can always charge any bill to your Discover card (if the firm accepts Discover). But it’s usually not a good idea to use that method for charges that vary. I don’t see any problem using it for a monthly ISP charge that remains constant. I wouldn’t let the phone company take whatever it wants out of any of my accounts, though, charge or checking.

Also, some companies will stop sending you statements in the mail when you use this option and switch you to an e-bill only, which causes a bit of inconvenience.

Author: NightStar
Posted: Thu Jan 27, 2005 1:49 am
Post subject: Automatic Credit Card Bill Pay

Thing I didn’t like about auto pay, especially out of checking account is if you don’t have a fixed day that your income goes into the account, and if they are auto billing too close to that period of time… one mess up of the funds not being there and it would cost you a over draft, late fee with the creditor and possible late listing on credit report.

I just figure that you can never know if an emergency come up that the funds were not there when you needed them to be and it could end up a mess.
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