Most banks in Singapore provide you with the option of clearing your credit card bills both manually or automatically. In the manual mode of payment, you have to enter your card or account details everytime you want to clear your dues. On the other hand, with automatic payments you can set up a recurring payment for a particular date, and your account will be debited with the amount each month on the due date based on your standing instructions.
You can automate your credit card bill payments through Interbank GIRO if you’re in Singapore. This mode of electronic bill payment allows you to automate the process of making payments to billing organisations. This method of payments allows you to do away with the hassles involved in making ad-hoc payments for the bills received. However, you must ensure that you have sufficient funds in your account if you want to opt for this particular mode of making payments automatically. Automatic credit card bill payments undoubtedly make your life easier, however, there are certain disadvantages associated with this mode of payment. In this article, we will try to understand the advantages and disadvantages associated with automatic bill payments.
Why Should I Opt for Automatic Credit Card Payments?
You might often forget to make payments on time or by the due dates. This may happen sometimes when you pay your credit card bills manually. In this case, you might incur unnecessary charges, such as late payment fees. Moreover, when we speak specifically about credit cards, missing payments might also mean more interest charges for the amount outstanding.
Such a situation can be easily averted by simply opting for automatic credit card payments. This mode of payment is not only simple and free of any hassle, but it also saves your time and effort. You can opt for the automatic mode of payment at any point and your bills will be cleared every month on the due date, provided you have sufficient funds in your account.
Disadvantages of Automatic Credit Card Payments
Although automatic bill payments make your life easier, they could also turn out to be your reason for stress. If you opt for this mode, it’s important to ensure that you have sufficient funds in your account, at least on the date the payment is due. For instance, if you have a have a history of overdrawing your account, automatic bill payment is probably not the best option out there, particularly when you don’t have funds enough in your account. In this case, automatic bill payments would only result in you having to pay unnecessary charges because of insufficient funds. Besides, missing out on payments could also have a bad impact on your credit report or your credit score.
Often you might find yourself in a position where your credit card debt is significantly large. When it comes to automating credit card bill payments, you can only automate it for full payment or for minimum payment each month. Paying fully might not often work in your favour as you might have an insurmountable amount of debts. In this case, clearing your dues in one go could result in financial stress. On the other hand, if you simply opt for automating minimum payments, your debts might end up piling up every month. As a consequence, you will have to pay more in terms of interest charges on the unpaid amount. In case of huge debts, you must ideally opt for manual payments. This will help you decide on the amount you can pay every month on top of the minimum payment, so that you can not only clear your dues faster but also avoid a financial crisis.
Last, but not the least, You don’t usually track for any error when you automate your payments. Basically, it’s the ease of payment that doesn’t really compel you to check your statements. Billing companies might make a mistake when they compile your dues and send you the credit card bills. However, in the case of manual payments, you can check your statements before you go on to make a payment. In this case, there are more chances of you finding an error in the statement, if there’s any. You must ideally opt for a statement even when you opt for automatic statements and ensure reading completely through it before you make the payment.
So What Should you Do?
Automatic bill payment does have its advantages and it is surely a more convenient way of paying credit card bills. However, you must be careful to check your statements to avoid any chances of error. You must also ensure that you have sufficient funds in your account so as to avoid unnecessary penalties and additional charges. Besides, you must also avoid overdrawing from your account and you will be good to go.