Automatic Deductions: Are They A Good Thing?
January 1, 2008 – 3:01 amIf you have a monthly payment, such as a mortgage, car loan, or any other debt, it can be tempting to sign up for an automatic debit to your checking account every month. No dealing with bills, stamps, the post office, etc. All the work is done for you and you have one less hassle to worry about. Or, do you? Read on and we’ll take a look at some of the pitfalls of this particular practice, some things you may not even before aware of.
Yes, if you pay a myriad of bills every month, it can soon grow tiring keeping track of everything. Companies understand how you feel and some are now allowing for you to sign up for a service whereby the monies you owe are simply taken out of your checking account on a monthly basis. All you have to do is submit your bank’s routing information, your checking account number, and give them signed permission to make monthly debits. Supposedly, you can cancel this step at any time.
While I am sure that some arrangements are just fine, there have been reports of problems, especially with companies who don’t halt automatic deductions as well as those who take out more than they should each month. Clark Howard, a noted consumer advocate, has mentioned on his show the problems that consumers have with this sort of method of payment. He warned his listeners to avoid the “convenience” and to simply send off the monthly payments. Apparently, some schemers would just love to get a hold of your personal information and use it to their advantage.
In this age of identity theft, you cannot be too certain just who has this sort of information. Why risk it? Opt out of monthly automatic debits to your checking account. Instead, sign up for free bill pay through a bank offering this service.
Tags: automatic deductions, automatic drafts, bank checking, car loan, consumer debt, free bill pay, mortgage