Autopay, credit card, or pay additional fee

[Mike Chance in Iowa]

In the last few months, I have noticed several utilities are now charging $5 extra per monthly payment if you pay your bill with a credit card, or like my cellular service, they charge an extra $5 per phone line if you pay via credit card. Okay. While I do understand the merchant fees for credit card processing, I know my utility is not paying over $5 in merchant fees on my low monthly utility bill or $10 in merchant fees for our two cell phones.

Today I received notice from my unreliable and slow DSL provider. Every two months, they increase my bill by $30. Every two months I have to call them and speak to several different departments before they reduce the bill back to their "special price" for another two months while they tell me they know service is bad and even though fiber is buried less then 1 block away, it will not be active in our rural area for years to come. I was fully expecting the email to be another price increase. Well ... it was a different price increase. Even though I pay promptly via manual bank transfer, now they are going to charge an additional "$5 payment processing fee" if I do not enroll in autopay. Oh, but they say it's good news! "It's free and easy to sign up and enjoy the convenience that autopay provides and save you from unnecessary fees!" Right .... easier for them to increase the bill by $30 again and automatically withdraw it from my account before they send a notice!

With all the banking automation that has happened in recent years it's amazing how much more costly it has become to pay your bills compared to sending a check in the mail! And here all this time I thought there was much more work for Accounting to sort and open envelopes, manually process checks and input the payment amount into the customer account and post the transactions.

[Thomas McCurnin]

You're thinking logically.

That's now how banks and utilities think. They think of ways to develop fees and to lower their labor costs, so the cheapest method for them is an auto-debit from your bank account, something I know is quite common, but it ain't happening here. I'm not giving any vendor ACH privileges to my bank account. I'll pay the fee, and usually pay a couple months worth with a credit card, so I have a credit and avoid a monthly payment and another fee.

[Tom M King]

It started here as a discount from our cell provider for autopay. We autopay everything, and our bank notifies us if something is much different than it has been.

[Brian Elfert]

Comcast applies a $5 discount for autopay via credit card, or a $10 discount for autopay via bank account. It used to be a $10 discount via either payment method until earlier this year. Verizon Wireless also offers a discount for autopay, but my brother pays that bill and I am part of his family plan.

The local electric co-op did not take credit cards at all until about two years ago, and charges no fee for credit cards. Maybe that is why our electric rates went up by just over 2% this year after no increase for five years straight.

[Brian Runau]

I had my landscaping guy tell me credit card fees are as much as 5% now. I gladly pay with check. Brian

[Alan Lightstone]

My real estate taxes just came due from the county. The credit card fee would have been $500. :eek:

No thank you. Paid by check.

[Ronald Blue]

We autopay everything but our water bill and that isn't yet an option with them. We also use a bank feature/benefit called online bill pay. One time payment or recurring is available. Our quarterly garbage bill is paid through it. Many are electronic payments but a few are an actual check that the processing company sends. Does your bank offer this service? It could be a viable option.

[Brian Elfert]

My real estate taxes just came due from the county. The credit card fee would have been $500. :eek:


I wouldn't want to pay your property taxes if the fee would be that much. I recall it is 2.49% fee here for using a credit card. The fee is $1 for paying by ACH from a bank account. Most governments use a third party for online payments so the company charges for their service. I would rather have a company that specializes in security dealing with payments than government.

[Pat Germain]

I wouldn't want to pay your property taxes if the fee would be that much. I recall it is 2.49% fee here for using a credit card. The fee is $1 for paying by ACH from a bank account. Most governments use a third party for online payments so the company charges for their service. I would rather have a company that specializes in security dealing with payments than government.

I get the lack of faith in government security, but it's not like commercial companies are doing any better. Remember the Solar Winds fiasco? :eek:

Mrs. Pat works a bank and absolutely REFUSES to allow autopay on anything. She spends much of her Sundays manually paying bills on web sites which are often broken because none of the Sysadmins are working on Sunday. I have to listen to complaints about broken web sites and lose much of the weekend to her paying bills. Ah, domestic life...

[Mike Chance in Iowa]

I like Tom's idea of paying a couple months worth ahead. I used to pay for most utilities and insurance, property taxes, etc bills once a year and be done with it, but since moving in 2010, it was harder for the companies to be willing for me to prepay so far in advance.... or in the case of internet service, too unreliable to pre-pay that far in advance! I'm going to try pre-paying for 3 months on my internet service but I have a suspicion they are going to tack on an extra $5 each month whether I pre-pay or not!

Online bill pay is available through a good majority of banks and credit unions and while I do utilize that option for any bill payment, I have added the extra security to receive text alerts for any deposits or withdrawals on any of my bank accounts and credit cards.

I'm with Mrs Pat. Once you sign up for autopay, it's much easier for them to take money out of your account than it will be for you to receive that refund owed to you when they make an error. Especially if their customer support is abysmal on a good day. You have to be selective and only allow autopay on companies you trust and have had good experiences with.

I actually ran out of paper checks about 10 years ago. I never bothered to order new ones when we moved in 2010. The few times I have needed a check, it's been super easy and free for me to go to the credit union in town and have them make up a cashier's check.

[Brian Elfert]

I get the lack of faith in government security, but it's not like commercial companies are doing any better. Remember the Solar Winds fiasco? :eek:


The state of Minnesota's payment site for vehicle registration renewals got hacked quite a few years ago and the state immediately shut it down. They didn't accept online payments for something like a year until they set up a contract with US Bank to do the online payments portion. Since then nearly every government entity I know of uses a private company to take online payments.

Private companies are not immune to problems, but when you're in the online payment business you tend to have a major focus on security and keeping everything current. Government IT departments tend to be chronically underfunded and don't keep everything 100% up to date. The state of Minnesota created a vehicle registration system in house that still required Internet Explorer when IE was being phased out. The system was so bad that the state scrapped it after a few years and went with a commercial vehicle registration system created by a private company.

[Curt Harms]

You're thinking logically.

That's now how banks and utilities think. They think of ways to develop fees and to lower their labor costs, so the cheapest method for them is an auto-debit from your bank account, something I know is quite common, but it ain't happening here. I'm not giving any vendor ACH privileges to my bank account. I'll pay the fee, and usually pay a couple months worth with a credit card, so I have a credit and avoid a monthly payment and another fee.

A bank here offers simple checking accounts with no minimum balance and no monthly fee. If i had need of an account for automatic withdrawals, I'd use that and keep enough money in that account to cover those automatic withdrawals and very little more. The trick is to find such an account.

[Brian Elfert]

A bank here offers simple checking accounts with no minimum balance and no monthly fee. If i had need of an account for automatic withdrawals, I'd use that and keep enough money in that account to cover those automatic withdrawals and very little more. The trick is to find such an account.

That pretty much defeats the convenience of autopay if you have to constantly monitor your balance and remember to make transfers for each automatic payment. You miss one transfer and the late fees and overdraft fees could be expensive.

[Lee DeRaud]

FWIW, I have at least one example of a company going the other direction.

State Farm used to add a (smallish) percentage if you wanted to pay by credit card. I've noticed the last few renewals didn't do that, so I can get a % or so back from the Costco Visa for paying that way. Yes, I know they probably baked the previous CC fee into the premium for everyone, but in my case it's still better than a poke in the eye with a stick. (Oddly, even my agent wasn't even aware of the change when I mentioned it.)