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What is Autopay and Should You Use It?

Autopay is a simple way to make sure you never miss a payment due date. But it’s not for everyone…or for every bill.

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Setting up automatic bill payments is a convenient way to make sure you’re paying bills on time. And it’s usually pretty easy to set up between the company and your bank. However, that “auto” concept isn’t automatically helpful. Because the money is coming out of your checking account, it means that you run the risk of not having enough cash to cover your expenses if you fail to monitor your account balance. That can translate to overdraft fees, charges and fraudulent activity if you aren’t careful.

Below, we’ll dive into how autopay works and how to help you decide if you should use them in the future.

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What are automatic bill payments?

An automatic bill payment, also referred to as autopay, is one way you can pay a recurring bill. It’s a straightforward process: Money is withdrawn from your checking account to pay an outstanding balance or fee on the date you choose.  

For example, you can schedule to pay your cellphone bill from your checking to your provider on the 15th of each month. On this day, the bill will be paid without any additional action on your end -- as long as you have sufficient funds in your account. This way, you won’t have to worry about forgetting a due date or making late payments.

A lot of people use autopay too. According to a 2022 study from, 39% of consumers pay their recurring monthly bills via autopay.

How do automatic bill payments work?

There are two common ways that you can schedule your bills to be automatically withdrawn from your account. The company can withdraw the payment from your bank account, or you can give your bank permission to pay the bill on a certain date.

How to set up autopay through a company or service

You can use an automatic debit payment that allows a company to withdraw the money from your account for either one-time or recurring payments. The business will request your account information and have you consent to the withdrawal. 

The steps for setting up automatic bill pay will vary from company to company. Generally, you’ll log into your account with the business, such as your electrical company account. Then, you’ll schedule a withdrawal for the outstanding amount from your account. With automatic debit payments, it’s best to verify that you’re sending money to the company you owe to avoid scams, fraud and identity theft. Always go through official channels or your online account portal with the company. 

Some companies offer a discount on the bill or interest rate if you schedule automatic payments. This is most common among loan products, such as home equity loans or personal loans, but you can always ask your lender or service provider whether they have any autopay discounts. 

How to set up autopay through your bank

Another way to automate bill payments is to use your bank’s bill pay option. This way, the bank will withdraw money from your bank account to pay the companies you owe. You’ll need to log into your bank account to enter how much you want to pay, where the funds will go and when to make the payment. 

The steps to setting up autopay through your bank are straightforward. Before we begin, you’ll need a list of the bills you plan to schedule, the company account numbers and an online bank account. 

  • Start by logging into your online account. Select the “Bill Pay” option. Your bank should have a button worded similarly. 
  • Enter the company name of the payee. Some banks auto populate this information to select from a list. 
  • Add the company’s account number. You can find this on your printed bill statement. 
  • Select which account you want to withdraw the money from, such as your checking account. 
  • Enter how much you want to pay and when you want to pay the bill. You may also be able to schedule when you want to make a payment -- whether weekly, biweekly or monthly. It’s a good idea to schedule your payment date for a few days before your due date to avoid missing a payment because of unexpected delays in the transfer process.

Which bills should you pay with autopay?

The best candidates for autopay are your fixed expenses. Because the bill won’t change from month to month, it’s easier to budget and plan to have enough money in your checking account. For example, if you know that a certain bill is always $850 and it’s always due on the 15th of the month, it’s easy to remember to make sure that your account has the appropriate amount of funds for that automatic withdrawal. Examples of fixed expenses include:

  • Premiums for health insurance, life insurance, auto insurance and homeowners insurance
  • Car loan payments
  • Mortgage or rent payments
  • Gym memberships
  • Subscriptions for services like cable and internet
  • Cellphone bills for unlimited plans (some plans have variable expenses, so be sure to look at your plan)
  • Daycare costs

When it comes to your variable expenses, however, you may be better off opting to manually pay each month. If, for example, your gas bill goes up significantly due to cooler weather, you may be in for a surprisingly large withdrawal from your account. The top variable expenses include:

  • A credit card bill
  • Electric and gas bills

What to keep in mind when you set up autopay to pay bills

When you set up automatic bill pay, you still need to keep an eye on your account. Because you’ll likely cover other everyday expenses, you need to have enough money in your account balance for these automatic deductions. For example, if you have a $200 autopay scheduled tomorrow and you go out for a $100 dinner tonight, your balance will be depleted by $300. 

If you consistently have a low balance in your bank account, or are living paycheck to paycheck, you might be better off paying those bills manually to avoid overdrawing your account from an unexpectedly high bill. But if you have stable income, keep track of your spending and have enough of a cash buffer in your bank account, the conveniences of automatic payments will outweigh any risks. 

For any payment scheduled, be sure to set a reminder to keep track of what’s been paid and how much is in your account. Most importantly, make sure there’s enough money in your account to cover recurring bills. If you know a particular bill will be larger than normal -- such as if you’ve charged an expensive purchase to your credit card -- you can always go into your account and manually pay off that bill before the due date instead of relying on autopay. Additionally, you should set up account alerts that’ll notify you if your balance drops below a certain threshold. This way, you’ll get a heads up if you’re on a path to draining your account to a zero balance.

Some companies won’t give you the option to set up automatic payments or will offer you more limited options compared with manual payments. For example, your utility company may only allow automatic payments of utility bills through an ACH transfer, but you may be able to pay your utility bill manually via cash, credit or debit card, or by mailing a check. In such cases, you’ll need to decide whether the conveniences of autopay outweigh the drawback of not being able to use your preferred payment method.

Pros and cons of automatic payments

Automatic payments can be a convenient way to make sure your payment arrives on time. However, there are a few downsides to consider. Here are the main pros and cons of autopay.


  • Convenience: You won’t have to worry about juggling due dates on the calendar or logging on to enter your payment information.

  • Timing: The most important aspect of your credit score is payment history. Maintaining on-time payments using autopay will help you to avoid receiving a ding from late payment on your credit report while boosting your credit score.

  • No late fees: If you forget to make a payment, the company is probably going to penalize you with an extra fee on your next bill. So, autopay is a simple way to eliminate those extra pesky expenses.


  • Overdraft fees: If you overdraw your account, and you’ve opted into overdraft protection services, you may pay some hefty non-sufficient funds fees to your bank or credit union.

  • Paying for what you don’t need: A set-it-and-forget-it approach to payments can also mean that you’re forgetting what you’re buying. When it comes to enrolling in several subscription services, for example, it can mean you’re paying for more entertainment offerings that you aren’t using.

  • Less attention to your budget: It’s important to keep a close eye on what’s coming out of your account because it keeps you honest about your spending and saving habits. Autopay can make life too easy and eliminate your focus on your budget.

Read more: What Is Overdraft Protection and Do You Need It?

The bottom line

For ease and convenience, you may want to try automatic bill payments. If you’re worried about overdrawing your account for a specific bill, or you need to change your scheduled payment date, you can typically cancel or skip a future automatic payment before it’s been sent out by contacting your lender or service provider or through your online account. Just make sure to manually pay the bill before the due date to avoid late fees and penalties.


In some cases, yes. Some loans offer an interest rate discount if you schedule your payment, such as student, personal and home equity loans. Some service providers, such as cellphone or utility companies, may also offer a discount. If you’re curious about whether you’ll get a discount on an automatic debit transaction or bill pay, simply ask the company.

If you want to unenroll from automatic payments for a recurring bill, or cancel an upcoming payment before it’s been sent out, it’s typically easy to do so by either contacting the company or managing your preferences from your online account. Depending on when you try to cancel and your scheduled payment date, you may not be able to stop a payment that’s already being processed.

It depends on the type of bill, the options available to you and the fees for each option. Some service providers may charge a convenience fee for paying with a credit card. In these cases, it’s better to pay directly from your checking account. If you regularly have a healthy balance in your checking, autopay can be a convenient way to make sure you’re always on time. If, however, you struggle to monitor your balance, it’s better to set up a reminder in your calendar and make a manual ACH transfer.

Dashia is a staff writer for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.
David McMillin writes about credit cards, mortgages, banking, taxes and travel. Based in Chicago, he writes with one objective in mind: Help readers figure out how to save more and stress less. He is also a musician, which means he has spent a lot of time worrying about money. He applies the lessons he's learned from that financial balancing act to offer practical advice for personal spending decisions.