CHARLOTTE, N.C. — With the holiday shopping season right around the corner, many people are considering buy now, pay later or automatic financing options for some of their purchases and recurring payments.
Some examples can be bills that are enrolled in automatic payments, such as a utility bill, car insurance payments or even loan payments. While convenient, autopay does have some drawbacks. Particularly, interest.
According to the Wall Street Journal, the amount of interest people are paying on cards jumped 19% from 2015 to 2020. That adds up to around $240 billion nationwide, according to federal data.
Borrowers who use autopay are paying off somewhere between 8%-17% less of their monthly credit card balances compared to users who make manual payments each month.
WCNC Charlotte is always asking "where's the money?" If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.
More than 75% of people are using autopay for at least one bill, according to the payment company Fiserv. There's another thing you should consider when asked to enroll in an autopay system. Banks could be profiting off your convenience.
Some institutions see customers enrolled in autopay as less risky because their payments are always on time. Which means they're more likely to off you more credit or other banking options. The goal is to pocket your money through higher interest rates on some of those options.
Wake Up Charlotte asked viewers how many things they have on autopay and the numbers varied anywhere from zero to eight. One person said all of their regular bills are on autopay as a matter of convenience and they use that tool to avoid late fees and other charges that come with getting behind on their payments.
"All of them," one viewer said. "Then pay the balance on time to avoid fees."
Do you use autopay? We'd love to hear from you. Text WCNC Charlotte at 704-329-3600.
Contact Kia Murray at kmurray@wcnc.com and follow her on Facebook, X and Instagram.
WCNC Charlotte's Where's The Money series is all about leveling the playing in the Carolinas by helping others and breaking down barriers. WCNC Charlotte doesn't want our viewers to be taken advantage of, so we’re here to help. Watch previous stories where we ask the question “Where’s the Money” in the YouTube playlist below and subscribe to get updated when new videos are uploaded.