Automatic ACH Payments Provide Reliability
Yes, there are still some accounts you don’t want to get paid automatically. Utilities that change each month can affect your budget. If you don’t have the money, then your bank account can suddenly get anoverdrawn fee, which makes it much harder to pay your debts. One way to counteract this is a properly budget as previously discussed. For the accounts that you do not mind setting up automatic payments, it is imperative that you do so. To be considered reliable and consistent, you need to reflect that image by setting up accounts that you don’t have to worry.
But, what about safety? It is a primary concern. You may also be asking yourself—what if I think I will have the money, but I end up not having it? The key to automatic payments is found in budgeting, but also understanding your financial limitations. Technology has helped us in so many ways with regard to payment consistency and reliability.
ACH payments started to blossom in the mid-2000s, when it was seen that the internet could truly be a tool for numerous things. However, it was not until the last six to eight years that more people have becomecomfortable with automatic payments.
Quite a few of the older generation are still not certain they should set up automatic payments or let their credit card information be known online. Around 2009, more secure measures were added. These measures for setting up automatic payments have become even better in the last five years.
This strategy is not so much about the improvement to your credit score that ACH automatic payments can offer you, as it is about gaining a side benefit. The side benefit is the reliability and consistency in your credit history, which does offer you an increase in your credit score. However, the true meaning of the is to be safe while you are using automatic payments.
How it Works
- On all accounts, where you can set up automatic withdrawals, do so.
- Set the payment to come out three days after your income is directly deposited or deposited into your account.
- Make the agreed payment for the month, in full.
- When possible, utilize online payment options that hide your identity.
Some credit accounts require your checking account information. However, other accounts are allowing you to use a secure account ID. You can set up a credit card number that is used only for online transactions where a hacker is unable to access the credit card holder’s information.
PayPal and other online methods of payment can also be used for secure transactions without your personal checking account information being spread. Some places treat PayPal transfers as direct deposits.
For this strategy, you are paying on time with your automatic payments, but you are also going a step further in setting up a means to keep your identity more hidden from potential hackers. If you have ever had your accounts misused or your identity stolen, then you know how detrimental it can be to your credit history and scores. You might not have been the one to make the mess, but you still have to live with the damage. Utilizing other methods of payment that keep your identity secure, while also setting up automatic payments for those credit accounts is one strategy you might wish to employ.
It is a newer option and less well known. Whenever possible pay with a credit card or online account that provides you with a number to use once or to use as a way to hide your checking account information for automatic payments. Bank of America also provides a safe shop system which adds an extra layer of protection when you shop online. It generates a temporary credit card number that links directly to your real credit card account number. Your card number remains completely private and protected.
Latest posts by Steven Millstein (see all)
- Hello, San Francisco - October 17, 2017
- How To Fix Your Credit Score - October 8, 2017
- Credit Utilization: How This Affects Your Credit Score - September 15, 2017