Automatic payment enrollment could cost consumers more over time
PITTSBURGH (KDKA) - From rent to subscriptions, more companies are offering automatic payment enrollment, and people are signing up.
When it comes to auto-paying your credit card bill, it could be costing you more money over time.
In theory, automatic payments should lead to fewer late fees.
However, federal data showed total fees and interest paid by cardholders rose 19% from 2015 to 2020.
Researchers found those using auto-pay often pay off less of their credit card balance and then end up having to pay more in interest. And as interest rates rise, that offsets the benefit of avoiding late fees.
Experts suggest if you do want to use auto-pay, set it for more than the minimum amount.
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