7 Things to Watch Out for When Using Autopay for Bills

The advent of online services like autopay has made paying bills more efficient than ever—with no more checks to remember to write and mail, automatic payments can keep your credit score high and save you from paying late fees. But experts warn that autopay has its disadvantages. "Sometimes set it and forget it can be a ticket to overspending," Ted Rossman, senior credit card analyst at Bankrate, told CBS MoneyWatch. Here are the main things to watch out for when using autopay for your bills.

It's a good idea to check your accounts regularly to ensure the autopays you've scheduled are actually posted. If something goes wrong, you could be subject to late fees and see your credit score dinged—something that's hard to correct if it's not caught promptly.

Another good reason to check your accounts regularly: Your accounts or cards might be used for fraudulent charges. It's better to address any fraud sooner rather than later. 

Experts say autopay is best for bills that stay the same every month. Debts with variable interest rates—like credit cards—may change upward, and if those bills are on autopay, you might end up paying them off less quickly than you plan. It's also too easy to stop opening your credit card bills altogether if they are automatically paid. You can lose track of how quickly your debt is mounting up. 

When your bank sends you a new debit or credit card as they approach an expiration date, make sure you update any autopays connected to those cards. Expired cards might be rejected, leading to late fees or canceled services.

If you've experienced fraud against your bank account, your bank may suggest closing your account and opening a new one. In that event, you'll need to update your autopays—they may not automatically track to the new account, even if it's with the same bank. 

There's another reason why it's not a great idea to put bills that fluctuate—like your electricity or water bill—on autopay. If, in a certain month, those bills spike well beyond what you're accustomed to, it could put you at risk of overdrawing your checking account. Depending on your bank's policies, you could be slapped with pricey overdraft charges.

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It's the latest insidious drain on Americans' bank accounts. There are so many subscription services for online music, movies, TV, and software, it's easy to sign up and lose track of the ones you're not using (or not using enough to justify the price). That's another reason why experts recommend checking your accounts regularly—you can determine which subscription services you can't live without, and which you can afford to cancel, saving money you don't need to be spending. Experts particularly advise against putting annual subscriptions on autopay: They're easy to forget, and the price for year two might be vastly more expensive than the initial signup.