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Most people know that on-time payments account for approximately 30% of your credit score. But even well-organized people may forget to make a credit card payment once in a while. Maybe you went away on vacation, or maybe you were ill … Whatever the reason, you had something to take care of and the due date slipped your mind.
One of the best ways to preserve your credit is to set up automatic credit card payments. This way you will never miss a payment.
Most major credit cards offer this option. Many banks also offer automatic online bill paying.
We’ll talk about both ways to automatically pay your credit card bill each month.
Paying Your Credit Card Bill through your Bank
To pay your credit card bill (or any other bills) through your bank, you’ll need to sign up for online banking. This usually takes just a few minutes.
Check with your bank, as well, because you may be entitled to additional perks when you sign up for online banking or automatic bill pay.
These perks may include cash back, lower fees or even, as Chase bank offered for a limited time, entry into special contests.
When you pay your credit card automatically through your bank, you set the date and the amount you want to pay each month (make sure it’s at least the minimum payment!).
You provide the mailing address where you would normally mail the check, and the bank sends the check automatically. Be sure to schedule the check to go out at least 5 days before payment is due (or however long your bank advises).
The problems with paying through your bank are:
- It is slow and still relies on the mail; and
- You need to adjust it each month to make sure you are paying the exact amount you want to.
This means there is no real set it and forget it option when paying through your bank’s website.
Paying Your Credit Card Bill Through Your Credit Card Company
It is often better and easier to pay your credit card bill automatically each month by setting up automatic bill pay through your credit card issuer. If they offer the service.
The reason is that you can set it up to automatically debit your account on the due date – which means you can wait until the last minute to make payment (and make sure the money is in your account.
You can also set up your payment schedule to pay off the entire statement balance each month. Or just pay the monthly minimum if you are going through a rough stretch. Either way, you can almost set it and forget it for several months at a time.
Many credit cards today offer the opportunity to set up automatic credit card payments, either online or over the phone.
When you set up automatic bill pay, you schedule the date the payment posts and the amount you’d like to pay. In most cases you can choose from:
- Minimum payment
- Statement ending balance
- Another fixed amount
If you choose the third option, make sure the fixed amount will always be at least your minimum payment.
You can change your choice at any time, so if you make a large purchase using your card, you’ll need to change the “fixed amount” that month before the payment posts.
You’ll need to activate your online account, or you can call the customer service department for your credit card company and ask to set up automatic bill pay. The money will be taken out of your checking account each month on the scheduled date. Have your checking account number and routing number handy.
We contacted some of the major credit card issuers to find out their policies on automatic payments. Here’s what they said.
- Discover – Yes. You can set up automatic bill pay online or over the phone. Online, you’ll find the option under “Customer service” –> “Payments & transfers” –> “Pay Discover.”
- CapitalOne – No. The Capital One website says it does not offer a recurring payment function, but that some customers are eligible to participate in the company’s AutoPay program. You can call 800-955-7070 to find out if you’re eligible.
- Citibank – Yes. On the Citibank website after you log in, you’ll find “Enroll in AutoPay” listed in the menu options underneath “Payments.”
- Chase –Yes. After you log in to your credit card account, click on “Payments & Transfers,” and then “Set up Automatic Payments.” Chase only offers two choices: minimum amount due or full amount due. You don’t get a choice of payment date, either. The payment posts on your due date.
- American Express – Yes. American Express representatives told me, through their customer service online chat, that you can set up automatic bill pay to pay your credit card bill online after you log in.
If your credit card issuer is not listed here, investigate your credit card website after you’ve logged in, or call the customer service number on the back of your card.
Paying your credit card bill automatically each month saves time and ensures you’ll never have a late payment again. Just make sure you have the money in your specified account to make the payment on the date you set.