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November 05, 2011


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My policy is ... no autopays to my bank account unless necessary. If anything goes wrong, or you want to cancel the account, autopays just go on and on--you have no control. I had that problem with a health club once and never again!

I do like online bill pay though. I'd never automate routine bills--I prefer to "notice" what I'm paying each month, and it's really fast even the way I'm doin it. It's a pain to set up though, so my bank has me sticking with them for that.

I only have one bank account autopay--my mortgage that is with my bank, because they gave me a special low rate only if it was autopay. I do have an autopay that's set to draw from a credit card--my young son's violin rental/buy. The autopay was required in order to be eligible for the seller's (otherwise free) instrument trade-in/replacement/buy-back policy.

My bank is my clearing house for all my bills. Any savings is minimal to get no chaarges for stuff. Yes it would be a pain to move but for now my bank is not gouging me with fees. When they do I will move but I have been with this bank since college.

I prefer the convienence of autopay for all my utilites and not writing a check. As for concerns listed above, I have not run into any of them in the 15 years I have been using auto pay.

I suspect the majority of FMF readers don't even experience the biggest hurdle to moving. If you are auto-paying large bills like a mortgage or car payment you can't be certain when it will take effect. Most of us have enough money to fund a second account, make sure all payments successfully come out of it, then close the first one. If you live check to check, finding the money to basically pay all of your bills twice can be difficult. I bet the chance of late fees or missed payments (which on a credit card carrying a balance could spike the interest rate) is even more of a deterrent than the inconvenience of going through each bill and changing the payment source.

I think it is a shame that people in this country have gotten so lazy and stupid that they would rather get taken advantage of than make the minimal effort required to switch banks. I have read quite a few articles over the past few weeks about how difficult it is to switch. I have switched banks a few times until I found one that fit my needs (Perkstreet) and all it took was submitting a new direct deposit form to my employer (which the bank actually provided... I just needed to fill it out), and changing a few accounts for online billpay (most of the accounts they already had in their database, so I only needed to enter an account #). Thank goodness there are still a few of us left that are willing to stand up for our rights and let these big banks know that we will not be taken advantage of. As for the rest of the people... thanks for nothing!

The entire premise of that article is ridiculous.

Don't use auto pays because it might be a pain to set them up later? Are you kidding me?

While it can be a pain to switch autopays to another bank, I agree with Steve and Brendan. If I become unhappy with my bank, I will change financial institutions. I'll not whine about how difficult the change might be. Sticking with my principles isn't always easy. In the meantime I'll not deny myself the ability to go on vacation without worry about bills being paid (a huge autopay advantage) based on some vague fear that something bad will happen in the future.

Why do well informed individuals even use banks. I have no need whatsoever for a bank account. I have been with my credit union since 1960 when I took a job in California with a leading aerospace company. At that time this Credit Union was only for company employees but it has since changed its name and is now open to everyone. Over the years I have had car loans and at one time even an unsecured loan from them. We have direct deposit of our pension and SS checks with them and I have one biller (our natural gas provider) that I pay using autopay because they don't accept credit cards. I also use my credit union's Checkfree bill pay system with which I am extremely satisfied.

Credit Unions are non profit organizations and I have never paid any fees whatsoever, even new check orders are free. The only requirements I must meet for avoiding all fees is to have a direct monthly deposit and to receive online statements. With Credit Unions if you are not close to any Credit Union offices (not just your own C.U.) you can also use ATMs at most 7-11 stores free of fees.

I autopay everything cause it saves time.

The auto pay is a hurdle that helps keep people where they are. The status quo is always the easier option. So yes I agree this keeps people from switching. Sorting out your checks and making sure all your bills are paid during a transition is probably as big of a hurdle. As DCS pointed out if you live paycheck to paycheck then a transition is even more hard cause you need to make sure you time it right so your paycheck funds your account before your mortgage or rent are due.

But its not really that difficult to change autopays. That should not keep you from doing autopay. It would literally take me 2 minutes to switch the autopay on our mortgage. It would take me as much time to manually pay the mortgage each month.

Limey I'm a customer with a megabank instead of a credit union cause my experience with the credit union in the past was no better or worse than the banks. Our bank has a convenient branch. Thats the #1 reason we stay with them. If the credit union had a more convenient branch office than the bank then we might switch to them. In general credit unions have better service, but that has not been my experience. Theres thousands of credit unions out there and they aren't all awesome.

The article you cited just sounds like they're complaining and worrying about the worst case scenario. I still have a Big Bank account with a lot of auto pay. But if I were to switch over, I'd do it over time, tracking down what accounts are still connected (or look at the transactions and see where they go to). It wouldn't be that hard.

In February 2010 I opened a bank account online at BofA for the express purpose of being able to use one of their ATM's that was inside a nearby supermarket where my wife shops. The BofA account where I always kept well under $1,000 was fine and there was never a fee involved however there was one very annoying problem.

Every week I would get one or more nuisance phone calls from BofA attempting to sell me a financial product that I had no use for. I asked to be removed from their calling list but to no avail and the calls persisted every week.

Finally I looked into where my credit union had nearby no-fee ATMs that I could use. The first surprise was that every 7-11 store in our area had one but upon further investigation I found that the login procedure had many more steps and passwords than I liked and lacked some features that I wanted. I then checked online again at my C.U. and found that there were other C.U.s in our area that were networked to my C.U. and one of them had a branch that was very close indeed. I tried it and found that it allowed me to do everything that I wanted with a very simple login procedure.

Success at last. The BofA account is now history and the annoying phone calls have stopped.

I avoid the switching "issue" by not having any auto-pays, except for a couple that come out of my Costco AmEx account because I get a discount from the merchant for doing so -- and I get the cash back thanks to AmEx. I will never have an auto-pay come directly out of my checking or savings accounts, mainly because I don't want money to move out of those accounts unless I have taken a positive step to make it happen.

OTOH, lazy people deserve what they get...

I autopay by setting up my utilities to draft the routing of my bank. Are you all using the bank to autopay the bills? I hear that is not preferable per Clark Howard.

I switched from a big bank to a credit union in 2010. It took me four months to do it as Rick said you have to watch that the accounts do not bounce. This goes for both my then big bank and my new credit union account. It was hard switching but I used my fury over what the big bank did to me that I had serious motivation to make it happen.

What happened was that a collection agency put a hit on my credit report for a default of $60 from an Ntelos account that I never owned. At the time I did not know how to dispute the charge and tried to make my case with the collection agency (now I learned that I needed to take these cases up with the credit bureaus). Once big bank got a whiff of this delinquent charge, $60 no less, they closed my credit card account right away. At the time I was an excellent customer with on time payments and a 792 FICO score to boot. I only realized why I was so quickly denied when they kept saying they would only take me back at the current offering of 15.9% and not at the 6.9% APR I originally had. Well I promised to leave them altogether!

If people are too lazy to spend a little time re-setting their autopays then they deserve to get gouged. Too many people in this country need to re-learn the value of hard work and responsibility.

I am very wary of the 'autopay' features of anything. We currently live in Germany and you must have almost everything on autopay - we learned the hard way that here you can't have your bank turn it off, you have to solicit the person pulling from your account - we couldn't get a hold of them and the money kept coming out of our account....lesson learned. I will always push and not have a pull - too risky.

The bank I do business with is conservative and healthy. I have done business with them for over 38 years, starting the year I started working there when it was an S&L. I worked there for 13.5 years. After I left it became a Savings Bank and later it merged with a local bank. I do not pay fees because I keep a $500 min. in the account. It is a Senior's Account. Have never had any problems with them. I also have 3 automatic deposits to them - SS & 2 small retirements.

I do have 2 autopays to services that do not accept cc's. The bank does not automatically transfer the money, they send a check. These 2 accounts are level pay and are always the same. I also pay my cc's through my bank, but since they are different amounts each month, I balance them and then manually set up the payments for 2 days before due.

On my cc's I have 4 automatic payments out, which are also level payments. Oh - the telephone bill might be 4-5 cents difference each month. And none of this, bank or cc's, causes me to have any fees at all. So - it would take a lot for me to change.

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