3 Pros and 2 Cons of Auto-Paying Your Credit Cards

Don't set your cards to auto-pay until you read this.

If you use credit cards, you may want to set up auto-pay. This would mean that you arrange to have the money you owe to your creditor each month taken directly out of your bank account. If you set up automatic payments, you don't have to manually pay your card when the payment is due -- this process is done for you.

There are some big benefits to setting up automatic payments of your cards. But there are also some undeniable downsides as well. You'll want to consider the pros and cons of auto-paying your cards before you decide to move forward with taking advantage of this feature.

Benefits of auto-paying your credit cards

Here are some of the biggest advantages of setting up automatic payments for your credit cards. 

1. You can make sure you pay off your balance and avoid interest: You have a choice when you set up auto-pay. You can opt to make only the minimum payment, or to pay your entire balance in full. If you choose to pay off your balance, you can make sure you never end up paying credit card interest. This can save you a lot of money in the long run since cards charge interest at high rates. 
2. You won't risk forgetting a payment: Setting up automatic payments ensures that nothing slips through the cracks. Forgetting a payment can lead to late fees and could damage your credit but you don't have to worry about this with auto-pay turned on. 
3. You can build your credit score: When you make payments on time on your credit card each month, these payments will be added to your credit record. Payment history is the most important factor that determines what credit score you earn, so auto-paying your card can have a big impact on helping you earn a good score. 

Disadvantages of auto-paying your cards

And here are some of the biggest downsides: 

1. You may not keep careful track of what you are spending: If money is just transferred out of your bank account to pay your credit card each month, you may not be fully aware of just how much spending you are doing. You'll likely pay less attention to what your card balance is if you don't have to manually pay it, and you are less likely to review your statement to see where you are spending and seek out opportunities to make cuts. 
2. You could overdraft your bank account: If you sign up to auto-pay your card and you do not end up having enough money in the bank to cover it, it's possible it could lead to overdrafting your account. That results in high fees, which can set you back financially. 

Is auto-paying your cards right for you?

Ultimately, you will need to weigh the pros and cons of setting up auto-pay. If you are worried about overdrafting or if you think that automatically paying your card will lead to less responsible spending, then you may not want to move forward. But if you are confident you'll have the cash and you'll stick to your budget anyway, setting up auto-pay is a great way to make sure you never face consequences associated with a late payment just because something slipped through the cracks.