Scheduled payments and autopay: how to never miss a bill

Two ways to put bills on autopilot

There are two main ways to automate bills in the U.S., and they work differently:

• Bank bill pay: you set up the payment in your own bank's app, choosing the amount and date. You stay in control and can change or cancel it anytime before it runs.
• Company autopay: you give your card or bank account to the utility, phone company or lender, and they pull the amount due each cycle. Convenient for bills that change every month, but the company controls the timing.

Both are usually free and help you avoid late fees and late payments on your credit report.

Read also: Credit score: what really moves your number and How to stop paying overdraft fees and get out of the red.

How to set up bank bill pay

1. Open your bank's app or website and look for Bill Pay or Pay bills.
2. Add the payee: name, account number on your bill and the billing address, or pick them from the bank's list of companies.
3. Choose a one-time payment or a recurring schedule, such as monthly on the same date.
4. Set the date a few business days before the due date, because some payments are mailed as checks and take time to arrive.

What autopay does not solve

Autopay does not create money. If the balance is not there on the payment date, the payment can bounce or trigger an overdraft fee. Schedule payments a day or two after your paycheck usually lands, not on the exact due date, and turn on low-balance alerts. If you have an overdraft problem, see how to stop paying overdraft fees.

Source: Consumer Financial Protection Bureau, Bank accounts and services.

Smart ways to use it

• Credit cards: set autopay for at least the minimum, so a busy month never becomes a late payment, then pay more by hand.
• Rent and fixed bills: bank bill pay works well for amounts that do not change.
• Variable bills: for electricity or phone, company autopay keeps up with the real amount, but review each bill for surprises.
• Review once a month: look at your scheduled payments and cancel what you no longer need, especially old subscriptions.

Payment history is the biggest factor in your score. See what moves your credit score.