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Trouble Paying That Credit Card on Time? Make it Automatic

https://www.paymentsjournal.com/bad-moon-rising-large-issuers-fine-small-issuers-stress/

Consumers are getting better at paying their credit card bills than they have been, largely because of an increase in the use of bill pay technology.  The recent article in The Ascent from The Motley Fool cites a report from the Bureau of Consumer Financial Protection that shows how more consumers are using automatic bill payment for their credit card bills.  As the article states:

Once your account has been properly set-up, automatic credit card payments make paying your bill convenient and easy. The automatic payment takes funds from a linked bank account on a recurring basis. That way you can pay off your credit card without making manual monthly payments. Usually, you can set it to make the minimum payment or to pay off your statement in full.

Over the past few years, there has been an uptick in credit card customers using automatic payments. The share of accounts enrolled in automatic payments increased from 11% in 2015 to 16% in 2018.

While our data comes from surveys and, as such is
self-reported, the trends tend to be the same. In 2016, 29% of customers
reported having their credit card payment automatically deducted from their
bank account.  That number increased to
38% in 2019 – representing a 31% increase.

While this may not be the greatest news for issuers who make money from interest and late payment penalties, it does mean that more consumers are going to have their bills paid on time.  I think only the issuers can quantify the actual impact of this movement toward automatic bill pay.  This also begs the question, what is the impact of all electronic payment methods on statement payment timeliness?  That’s another article for another day.

Overview by Pete Reville, Director, Primary Research Services at Mercator Advisory Group

The post Trouble Paying That Credit Card on Time? Make it Automatic appeared first on PaymentsJournal.

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