The Downside of Autopay: How It's Affecting Credit-Card Bill Management

The use of autopay for credit card bills has doubled in recent years, but it is costing consumers more money. While autopay can help avoid late fees, a study found that borrowers who use autopay pay off between 8% and 17% less of their monthly credit card balances compared to those who make manual payments. This leads to higher interest payments, offsetting the benefit of avoiding late fees. Additionally, autopay can pose risks if customers have insufficient funds or unenroll before their balance is paid in full. Financial advisers suggest actively managing credit card accounts and paying bills manually to stay on top of spending and avoid potential overdraft fees.