There are some good reasons to sign up for automatic bill payments, but I've never seen the downside more dramatically illustrated than this month in Michigan.
That's where the mummified body of a middle-age woman was found in her garage, more than five years after she is believed to have died, after the money in her bank account that had been automatically paying her bills finally ran out.
A Detroit Free Press report said the woman had about $54,000 in her account in 2008, when she is believed to have died. Those funds automatically paid her bills, including lawn care apparently, until the cash was gone and the house foreclosed on.
Now, that was an extreme case, to be sure. Most of us would expect a friend or family member - maybe a neighbor - to notice if we died.
But you can bet that if your bills are being automatically deducted from your bank account, those payments will keep on going until you (or your estate) stop them.
That can be a good thing. The whole point of automated payments is, after all, to make sure your regular bills are paid on time without having to worry about them.
Automated payments can be a handy way to take care of regular monthly bills. Most banks will let you schedule automatic payments from an account. Some companies, including utility providers, will allow automatic payments from a credit card account - a fine idea if you always pay the credit card bill in full each month so as not to rack up interest charges - and many companies will offer to withdraw funds directly from your bank account.
But just like putting an airplane on auto-pilot or a car on cruise control, using automated payments doesn't mean you can set it and forget it.
Here are some things to watch for:
If you schedule automated payments from your bank account, make sure the due date for the bill is the same each month. Credit cards, for example, typically bill on a 28-day cycle, so the due date will move up by a few days in most months. Some cards allow setting a billing date that won't change, which simplifies things.
If you schedule automated payments from a credit card account, remember that you'll have to update your information with bill collectors whenever your credit card's expiration date changes. You'll know the expiration date changed because you'll be issued a new card with a new date, but sometimes all the biller will know is that the old card they have on file doesn't work any more.
If you allow companies to automatically debit (withdraw funds from) your bank account, don't forget to check your bank statements and confirm that they have taken the correct amount. Personally, I avoid giving companies permission to withdraw funds from my bank accounts.
If you are married or otherwise in a relationship with shared financial responsibilities, make sure that information about automatic payments is shared with your partner. If something were to suddenly happen to you, they'd need to know how the bills were getting paid.
Finally, keep track of all the bills you put on auto-pilot. You may find that some of the things you are automatically paying for each month, or each year, are things that you no longer want or need.
Reach David Slade at 937-5552.
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