I have autopay set up on all my bills: credit cards, utilities, insurance, everything. Whatever amount comes due, the company pulls the money from my checking account on the due date. Some people worry that this gives the companies too much privilege over their bank account. I can only say that in over 10 years among all the companies that I had autopay with, no one ever pulled the wrong amount or a duplicate from my bank account.
I like autopay because I don’t ever have to worry about paying bills or whether the companies credit my payments on time. Once I set up autopay, paying the bill in full on time becomes their responsibility. I only need to make sure I have enough money in my checking account. I still look at the paperless bills to make sure they are correct, but I don’t do anything to pay them. If I go out of the country for a year, all my bills will still be paid like clockwork without my ever logging into my bank account.
Most companies make it easy to set up autopay. They too love to have assurance that their bills are paid in full on time. Usually they have a place on their website for you to give them the routing number and the account number of your checking account. Some companies do a test deposit to validate the account. Some don’t even do that.
However, it isn’t so obvious how to set up autopay for a Bank of America credit card. If you must do it online, you have to go through the Bill Pay system as if you are paying a third-party bill. There’s also an unadvertised way, which I think works better than the Bill Pay system. I went through this recently when I needed to make a change to the autopay setup.
Like every other bank, Bank of America has an online bill payment system. Here you can enter you bills and schedule your payments. You can pay from a Bank of America checking account, or you can link an external checking account as a “Pay From Account” under Bill Pay -> Manage Accounts. If you add an external checking account, you will have to verify it via test deposits.
Your Bank of America credit cards don’t automatically appear in your list of bills. You’d have to add them manually. After you add your credit card as a bill, there is a link for AutoPay, which looks promising but it’s only for paying a fixed amount on a set schedule.
If you’d like to pay the full statement balance, which varies from month to month, you have to enable eBill for this card. You then wait until the first eBill comes into the Bill Pay system. Now when you click on AutoPay again, you will have the option to pay a variable amount based on the eBill. Be sure to select Account Balance because both Amount Due and Minimum Amount Due will have you only make the minimum payment. Basically the Bill Pay system looks at the statement balance and due date on each eBill and then it schedules the payment. The credit card side receives the payment from the Bill Pay system as if you paid through Bill Pay manually.
Going through eBills in the Bill Pay system looks convoluted to me. For my other bills I just tell the companies which account to debit. It turns out you can do the same with Bank of America credit cards too, but you don’t see it advertised anywhere. You have to call the customer service number on the back of your card. You ask them to send you a paper form by mail to set up autopay. You fill out the paper form and you mail it back. Setting it up this way is more direct. The credit card side pulls the money from your checking account directly without the Bill Pay system in the middle. Once it’s set up, you will see a note on your statement, just like other cards.
The lesson learned is simply don’t be afraid of paper or mail. Setting it up online would be nice but old school paper and mail still works, especially for infrequent tasks. If you need to update the bank account, simply call them again and ask for another paper form.
Say No To Management Fees
If an advisor is charging you a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice: Find Advice-Only.