Credit card autopay explained
Key takeaways
- Autopay is a feature offered by most credit card issuers that allows customers to automatically pay their balance or minimum payment from a linked bank account.
- Customers can enroll in autopay through various channels such as online, through the mobile app or by calling customer service.
- While autopay offers convenience and protection against late fees, it is important to still monitor credit card statements and spending habits regularly.
Are you tired of having to remember to pay your credit card balance or minimum payment manually each month? If so, consider asking your issuer about the autopay options they may offer.
Automatic payment options are offered on many billing platforms, such as utilities, subscription services and memberships. But despite the growing prevalence of autopay, many consumers may still find autopay to be confusing when it comes to credit cards. Here’s what you need to know before enrolling in autopay with your credit card issuer.
What is autopay?
Automatic payments or “autopay” is a feature offered by most credit card issuers that allows you to have your balance or minimum payment automatically paid from a bank account when your statement is posted.
You can set up autopay with your credit card issuer over the phone or online. The payment may come out of your bank account on the bill due date, or your credit card issuer may allow you to choose another payment date. You can discontinue the feature at any time.
Who offers autopay?
| Issuer | Automatic payment options |
|---|---|
| Chase | Enrollment is available online, in the mobile app, over the phone at 1-800-346-9127 and in person at a local Chase branch |
| Discover | Enrollment is available online, through the mobile app or by calling customer service at 1-877-449-5620 |
| Barclays | Enrollment is available online, through the mobile app or by calling customer service at 1-877-523-0478 |
| American Express | Enrollment in autopay is available online, through the Amex app or by calling American Express customer service at 1-800-528-4800 |
| Capital One | Enrollment is available online, through the mobile app or by calling customer service at 1-800-227-4825 |
| Bank of America | Enrollment is available online, by mobile app or by calling customer service at 1-800-432-1000 |
| Wells Fargo | Enrollment is available online, through the mobile app, over the phone at 1-800-642-4720 or in person at a Wells Fargo branch |
Autopay options
If you decide to enroll in autopay with your issuer, you will likely be presented with three options: pay the minimum, pay the full balance or pay a fixed amount. Here’s the difference between them:
- Pay the minimum: Automatically paying your minimum can ensure that you aren’t hit with late fees if you forget to pay your bill on time. Minimum payments vary, with some issuers charging a flat rate, such as $25 a month, while others charge a certain percentage of your total balance. As with manual payments, only paying your minimum will cost you a lot in interest over time, so if you enroll in autopay at the minimum amount monthly, be sure you’re making supplementary payments often to avoid getting into long-term debt.
- Pay full balance: When it comes to credit cards, paying your monthly balance off in full is always the best practice. If you choose this option for autopay, be sure that your checking account has enough money at the time of the automatic withdrawal each month. If a payment posts to your account and you incur an overdraft, you could be hit with overdraft charges and a return payment fee from your issuer.
- Pay a fixed amount: This can be a good debt reduction strategy if you’re steadily working to pay off a large balance because you can tackle your debt with payments that work for your budget. Keep in mind that paying anything less than your full balance results in added interest. If you’re worried about missing a payment, setting up autopay for a fixed monthly amount can offer you peace of mind.
The benefits of autopay
The most obvious benefit of setting up automatic payments is that it saves you from any late fees or hits to your credit score that may occur when you forget to pay your credit card bill.
When life gets hectic, it is easy for a payment deadline to slip through the cracks. If this happens, services like automatic payments offer backup to ensure you never miss a payment. Setting up automatic payments gives you the freedom to use your credit card and earn rewards without the hassle of remembering to pay your balance monthly.
How to use autopay effectively
Know that even if you’ve signed up for automatic payments, you shouldn’t neglect your credit card entirely. Once you’ve successfully enrolled in autopay, you’ll want to continue to routinely check your credit card statements for any outstanding balances or issues with your payments. Checking your account often is also a sure way to catch any suspicious or fraudulent charges that may have been made with your card.
It’s also very important you have sufficient funds for autopay. To make the most out of automatic payments, you need to be able to pay off what you’ve accrued each month. Overdrafting your credit card is a fast way to undo the benefits of autopay.
Things to consider before enrolling in autopay
While autopay is certainly convenient, it may not be for everyone. Before enrolling in autopay, take note of your current financial health and decide if now is a good time to take your eye off your charges. If you’re focused on rebuilding credit, you may not want to risk accidentally overspending.
Autopay makes paying your bills a simple process, but it also means that you may spend less time monitoring your credit card statement and spending habits. It’s important to still monitor your account for fraud or if you spent more than expected.
The bottom line
The value of autopay depends on how you use it. If you’re looking for extra protection against the added fees that come with forgetting to pay your balance, then autopay could be a great option for you. It’s also readily available for almost all of the best credit cards. But, if you forget to check your credit card activity regularly, setting up autopay could lead to more problems down the road.
Autopay is a great way to ensure that you never forget a payment deadline, but it can’t replace the important practice of diligently monitoring your accounts and spending habits.
