Why I Don’t Autopay My Credit Cards
One of the best features of personal finance in 2023 is the ability to automate several aspects of your financial life. In fact, some have said that doing so is one of the keys to mastering money. For the most part, I agree with this as I’ve seen the benefits of automated savings, investing, etc. Furthermore, nearly all of my regular recurring bills are set to autopay. Well, that is except for a few key monthly bills: my credit cards.
That’s right, I’m not a fan of automatically paying off my credit cards. Instead, even as my rewards card portfolio grows, I still manually make payments each month. However, there are a few reasons for this — so let me explain.
3 Reasons Why I Don’t Make Automatic Payments on My Credit Cards
First of all, one reason why I don’t like to autopay my credit card balance is that I want to look over my purchases for the month and ensure nothing is amiss. While I may not go through every single transaction and compare it to receipts like some people I know, I do like to give everything a quick scan. Specifically, I look for merchants I don’t recognize off-hand, subscriptions that may have risen in price, and, in some cases, remind myself of purchases that my boss needs to reimburse me for.
After I do this brief review, I’m one step closer to being ready to pay off my full balance.
As we’ve established, I basically use my monthly credit card payment as an excuse to do a financial review. Well, this not only includes looking over the money I spend during the month but also what I earned. After all, since 97% of the reason why I use credit cards is to rack up rewards, it makes sense that I should see where I stand in terms of cashback or points.
In the case of cashback, I can decide whether there’s a specific purchase I want to cover with a statement credit, apply my credit more broadly, or keep letting it accrue. With one of my cards, I can only cash in points once I surpass $25, so there’s even more to consider as I debate whether I want to take the money and start over or hold off. Meanwhile, with my cards that earn points, it’s more a matter of knowing my balance so I can (eventually) start figuring out how I want to redeem them for a trip.
Either way, although I can check this info at any time, I enjoy wrapping it into my transaction checking time.
Moving money/selecting an account
The last reason why I don’t autopay my credit cards is probably the biggest: I may need to move some money. Yes, it sure would be nice if I just had a ton of cash in all of my accounts so that I could pay off my balance without even looking at my funds but that’s just not the case. Since I keep the bulk of my non-invested cash in high-yield savings accounts and get paid irregularly as a freelancer, there are times when I need to make a transfer from one account to another before making a payment.
Now, couldn’t I just link all of my accounts to my credit cards so I can just make payments from wherever? Well, yes I could — but that sounds like work. Plus, it doesn’t change the fact that I’d still need to review which account I want to use and, thus, wouldn’t want to use autopay.
By the way, anticipating that I may need to make moves, I typically check my credit card balance two to three weeks before the statement is due. That way, I have more than enough time to do what I have to and make my manual payment.
For as much as I love automation in my finances, credit card autopay is where I draw the line. Perhaps one day I’ll get on board — especially if I do keep adding to my card collection — but, for now, I’m content with my monthly review strategy. Of course, just because I don’t like autopay doesn’t mean that I wouldn’t recommend it for others. If your payment dates tend to slip your mind or you want to ensure that you’re always paying off the full balance, then, by all means, autopay away! But, at the end of the day, there’s also no shame in the manual approach.