What are automatic payments?
We all have to pay bills, whether we want to or not. And we always get upset when we don’t have time to pay a bill and we have an overdue payment. Unfortunately, our frantic pace of life does not allow us to rely on our memory, and it’s good that we can always set up automatic payments and not worry about anything.
What automatic payments are, how to set them up, and why they are so important. We’re going to talk about that right now.
What is an automatic payment and how do I set it up?
Automatic payments are called so because they are made automatically without your involvement. For example, on the 26th of each month, you have to pay your loan payments, or you have to pay your suppliers for the products or materials delivered before that date. That’s fine, but the problem is that you already have a lot of worries to remember. Therefore, the likelihood of missing the moment of payment is very high.
It can be followed by not the most pleasant penalties in the form of fines.
To prevent this from happening, you apply to the bank with a request to transfer a specific amount on a certain date to a particular recipient so that the account is successfully paid. From this moment you cannot worry about your commitments, because the necessary amount will be written off from your account or card to the account of the recipient on a clearly defined date. And you will not have to keep it in your head.
However, you need to keep in mind some differences between setting up automatic payments for credit cards and current accounts. For example, when you set up regular credit card payments, all you have to do is log into an account on the website of the company you plan to make a regular payment. All you have to do is specify your credit card number, and a specific amount of money will be automatically debited from it. For example, you can do this for payments to Netflix.
If you set up automatic payments from your current account, an automated clearinghouse will usually be involved.
There are several ways to set up automatic payments, but each of them is perfectly simple and straightforward.
For example, you can go to your bank and log into your account by going to the bill payment section. Next, it is important to decide from which account the payment will come, as well as enter the number of the account to which the money will be transferred and specify the amount.
Another way to set up automatic payments is to contact the company in whose favor you plan to make these payments. Here, too, everything will be done through an account on the company’s website, and to make the necessary payment settings, which will be provided automatically, you will not need to spend a lot of time.
The advantages of using automatic payments
The first obvious benefit of using these payments is zero chance of forgetting about them. No matter how good your memory is, you won’t be able to remember everything, and very often having to pay a bill will be the last thing on your mind. Automatic payments will free you from the worry of forgetting to pay.
It is easy to plan spendings with automatic payments. If there is a need to pay bills urgently it won’t be surprising. Moreover, one can no longer worry about penalties.
In the case of loan payments, these penalties can be significant.
When are automatic payments is not the best solution?
At first glance, it might seem that automatic payments are very convenient and have only positive aspects. But you will not always do the right thing by setting up auto payments. Let’s take a look at a few examples:
- You got fired. If you’ve lost your job, you can’t guarantee that you’ll have the money you need to pay your bills. At least until you find a new job;
- You are a freelancer. Freelancing has many advantages compared to a salaried job, but there are also disadvantages, particularly the irregular income. In this case, automatic payments will not be the best solution for you.
Another reason why you shouldn’t use automatic payments is your desire to control everything. Some people like to pay their own bills, and even enjoy doing so because they are in control.
These are probably the only reasons why automatic payments are not the right solution for you. Still, it is worth admitting that they have many more advantages than disadvantages.
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