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Benefits of Setting Up Autopay

Autopay is a convenient billing feature that automatically handles your bill payments each month. Many service providers, lenders, and credit card companies offer it to ensure you never miss a payment. Utilizing this feature helps keep your accounts in good standing and avoids late fees and credit score damage. Read on to discover the benefits of autopay and how to set it up.

Advantages of Using Autopay

It’s Convenient

With autopay, you no longer need to remember to pay multiple service providers and creditors each month. Payments are automatically deducted from your chosen bank account. Just ensure you have enough funds to cover the debited amounts.

It Can Help You Build Credit

Payment history is the most influential factor affecting your credit score. Setting up automatic bill payments for loans and credit lines helps establish a positive credit history, improving your credit score and avoiding late payments that can lower it.

It Could Save You Money

Some lenders offer a small interest rate discount for using autopay, which can save you money over the life of your loan. Additionally, autopay helps you avoid late payment penalties. Credit card companies may charge late fees or a higher APR called a penalty APR, which can be up to 29.99% depending on the issuer. If you have a credit card with an intro 0% APR on new purchases or balance transfers, paying late could terminate that deal, costing you more if you have a high balance.

How to Set Up Autopay

The process of setting up autopay varies by service, but it can generally be done online, via an app, or over the phone. Here’s a general guide:

1. Log in to your account: Use your username and password to sign in to your credit card or service provider’s account.
2. Go to payment options: Look for an option to set up or enroll in autopay on the payments page.
3. Choose how much you want to pay: Credit card companies usually ask for the amount you want to pay automatically, such as the minimum due, the statement balance, or another fixed amount.
4. Choose the payment date: In some cases, you can select a payment date that fits your budget. You may also split your autopay amount between two dates, making two payments at different times of the month.

What to Remember When Using Autopay

Even with autopay set up, regularly review your statements to verify each transaction’s accuracy. This helps you catch any incorrect or fraudulent charges that should be reported immediately. Also, ensure you have enough money in your bank account each month to cover all debited bills. Insufficient funds can result in non-sufficient fund fees from your bank and returned payment fees from the company attempting to pay your bill.

The Bottom Line

Setting up autopay can be a convenient way to “set and forget” bill payments. If you already have monthly transfers scheduled for savings and investing contributions, this is another way to automate your budget. If you’re considering using autopay to build credit, signing up for free credit monitoring with Experian can help you track your credit score and report. You’ll also receive alerts for any suspicious activity and changes to your Experian credit report and score.

For any mortgage-related needs, feel free to call O1ne Mortgage at 213-732-3074. We’re here to help you with all your mortgage questions and requirements.

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