How to Set Up Autopay for Your Credit Card to Avoid Late Fees

If you’re getting in the swing of practicing good credit habits, an easy way to stay on track is to set up autopay on your credit card accounts. 

You can use autopay to automatically pay your bills each month, so you don’t have to worry about missing a payment. Most credit card issuers let you pay your credit card bill via automatic payments to keep your account in good standing, so you can avoid the negative credit consequences that come along with missing a payment. And you’ll have some flexibility to choose when you want to make payments each month. 

With credit card debt surpassing $1 trillion in August for the first time in US history, autopay may offer you some peace of mind, freeing you from having to worry about missing a debt payment again. Though it may not help you wipe away your debt immediately, it can keep you on track while you work on a debt repayment plan.

To help you get started, we’ll show you how to set up autopay, we’ll run through different automatic payment options, and we’ll look at which credit card issuers offer autopay. 

What is autopay?

Autopay lets you set up recurring monthly payments so you can automatically pay certain accounts on time, like your credit card bill. 

You can schedule your payments in advance to avoid forgetting the due date and ensure your payment is made on time. Usually, you can opt to pay the minimum payment, the full balance or a fixed amount every month. When setting up autopay, you’ll pick a date for the payment to be withdrawn from your bank account to pay the bill  -- you can set your own date or choose to pay on the due date.

It’s a convenient and automated way to pay your other bills, too, said Anoke Miller, a financial advisor at Ambitious Investor. Think of autopay as a good set-it-and-forget-it approach to making sure payments are made on time. You’ll just need to be certain the funds are available in the account when the payment is drafted, to avoid your account being overdrawn. The best way to do this is to factor all of your bills and credit accounts into your monthly budget, so you don’t lose track of them.

Read more: How to Create and Master Your 2023 Budget

The benefits of autopay for credit card payments

Since missing a credit card payment can ding your credit score and pile interest onto your debt, experts recommend setting up autopay. Here’s how autopay can help:

• Saves you money. You might face interest, penalty APRs, and late payment fees when you miss a credit card payment. These fees pile on to your existing debt, making your bill more expensive. Scheduling autopay to cover your entire bill or minimum payment can help you avoid and minimize these fees.
• Helps your credit score. Your payment history is one factor that goes into calculating your credit score. And, each time you pay down your bill, your credit utilization ratio -- the amount of credit you carry versus your total available -- decreases, which also boosts your score. Scheduling on-time payments with autopay can help you mindlessly improve your credit score.
• Easy and convenient. If you prefer to avoid logging into your credit card account each month or remembering which day your payment is due, setting up regular payments with autopay can save you time and effort.

The risks of setting up autopay on your credit card account

While autopay has many benefits, you must be more careful to avoid overdrafts or financial confusion. Here are some drawbacks to consider:

• Overdraft or nonsufficient funds fees. If you don’t have enough money in your bank account when your automatic payment goes through, you could overdraft your account. When this happens, your bank might cover the charge but could charge an overdraft fee. If your bank denies the charge, you might be hit with an NSF fee for not having enough money to cover the transaction.
• Overspending. If you don’t check your credit card account regularly because you know automatic payments are turned on, you might be more tempted to overspend. To avoid this, make sure you check your credit card spending weekly.
• Budgeting confusion. If you don’t remember when your credit card payment is due, the charge could surprise you and lead to budgeting conflicts in your bank account. Make sure you mark your payment due date on a calendar to avoid this surprise.

Autopay options most credit card issuers offer

If you choose to enroll in autopay, most credit card issuers offer a variety of payment options:

• Pay the minimum: You can opt to pay the minimum amount owed to ensure you aren’t hit with late fees. However, if you don’t intend to pay your full remaining balance, you’ll be hit with interest charges that can add up, since interest accrues daily for credit card balances you carry month-to-month.
• Pay the full balance: Setting automatic payments for the full balance is the best way to ensure you don’t inherit any interest on an outstanding balance. But before you choose this option, be sure your checking account has enough to cover the full monthly balance to avoid overdraft fees. A good practice is to be certain you can cover the charge in full each time you use your credit card, so you won’t run into any surprises when your automatic credit card payment is withdrawn from your bank account.
• Pay a fixed amount: If you’re paying off a large credit card balance, you may allocate a certain amount that’s more than the minimum balance but not as high as the full amount. Though you’ll still accrue interest on any remaining balance you carry, it’s a good way to make sure you continue to chip away at the balance by paying more than the minimum.

Step by step guide to setting up autopay for your credit card

Setting up automatic payments can usually be done in a few minutes online or through your credit card’s mobile app, though you can also set up autopay by phone. Here’s a general step-by-step guide -- some steps will vary depending on the issuer. 

1. Log in to your credit card account online or via the mobile app. 
2. Choose the “Autopay” or “Recurring payment” option. Some banks also have the autopay feature shown separately online or in the app to make it easy to find, said Miller. Some may include detailed instructions to simplify setting it up, she added. 
3. Enter the amount you want to pay each month. You may have the option to pay the amount in full, the minimum balance, or an amount you designate.  
4. Connect your bank account using your external bank’s routing and account numbers. Some card providers might use a third-party tool like Plaid to connect your account, but you can often choose to enter your details manually if you prefer. If you already have an account on file, you can typically select the account and move on.  
5. Authorize that you’re setting autopay by signing or agreeing to the terms. If you’re uncertain about any parts of the agreement, check with your card issuer. 

Remember that you can adjust the amount withdrawn each month or discontinue this feature at any time. And banks usually don’t charge a fee to set up or cancel the service. 

Which credit card issuers offer autopay?

Many banks and card companies let you set up autopay online, via their app, by phone or in person. Here’s a list:

• American Express: Set up autopay online, through the mobile app or by calling customer service at 1-800-528-4800.
• Bank of America: Set up autopay online or by calling customer service at 1-800-432-1000.
• Barclays: Set up autopay online, through the mobile app or by calling customer service at 1-888-710-8756. 
• Capital One: Set up autopay online, through the mobile app or by calling customer service at 1-877-383-4802.
• Chase: Set up autopay online, through the mobile app, by calling customer service at 1-800-935-9935 or by visiting a branch in person.
• Discover: Set up autopay online, through the mobile app or by calling customer service at 1-800-347-2683.
• Wells Fargo: Set up autopay online, through the mobile app, by calling customer service at 1-800-869-3557 or by visiting a branch in person.

Should I set up autopay on my credit card?

If you’re worried about missing a payment or you can roughly estimate your credit card bill each month -- and you steadily have income to pay it on time -- autopay may be worthwhile. For instance, if you know that your credit card bill is about $1,000 each month and you always have the funds to pay the bill, you may choose autopay. 

However, if your income and credit card balance heavily fluctuate from month to month, setting up autopay may hurt your finances. For example, if a $1,500 automatic payment for your card is pulled from your bank account and you don’t have enough money to cover the payment, your bank account may end up in the negative -- and you could be hit with overdraft or nonsufficient funds fees. In this case, it might be better to set up a calendar reminder for a few days before your credit card payment is due, so you can make the payment on time. Or, you might try treating your credit card like a debit card to avoid carrying a monthly balance.

FAQs

Correction: An earlier version of this article was assisted by an AI engine and it mischaracterized some aspects of automatic payments. Those points were all corrected. This version has been substantially updated by a staff writer.